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Wednesday, April 14, 2021

NASDAQ Hits New Record as Stocks Overcome Weak Jobs Data

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A disappointing jobless claims report dragged stocks lower in the morning, but good old technology helped the market recover and even log another record close.

Let’s just get the unpleasantries out of the way. There were over 1.1 million jobless claims last week, which was more than expected.

Even worse though, it comes just a week after this report dipped under 1 million for the first time in 20 straight weeks, making it even more disheartening.

And we’re just a day removed from a less-than-enthusiastic read on the economy from the Fed, which stated that this pandemic could “weigh heavily” on prospects for the near-term and possibly medium-term.

Maybe such news will foster some urgency in Congress to get a coronavirus relief packaged passed. But don’t hold your breath.

Nevertheless, the market persevered with a lot of help from tech. The FAANGs all gained more than 2% on Wednesday save Amazon (NASDAQ:AMZN) with a 1.13% advance. Microsoft (NASDAQ:MSFT) was over 2% too.

As a result, the NASDAQ jumped 1.06% (or around 118 points) to a new record of 11,264.95. This marks the third milestone for the index this week.

The S&P was up 0.32% to 3385.51, while the Dow broke a three-day losing skid by rising 0.17% (or nearly 47 points) to 27,739.73.

The NASDAQ and S&P are both higher for the week heading into Friday’s session. The former index is actually up more than 2% so far on a strong week for technology. The Dow is down by less than 1%.

It’s shaping up to be the opposite of last week when the Dow jumped 1.8% while the NASDAQ fought to stay positive.

Today’s Portfolio Highlights:

Surprise Trader: Natural and organic foods company Hain Celestial (NASDAQ:HAIN) will be going for a fourth straight positive surprise on Tuesday, August 25th before the bell. With a positive Earnings ESP of 2.94%, the company has a good chance of succeeding. The Zacks Consensus Estimate for this quarter calls for earnings growth of more than 28%, while next quarter’s is as high as 112%. Dave added HAIN on Thursday with a 12.5% allocation, while also selling JELDWEN (JELD) for an 8.5% return in less than a month. Read the full write-up for more.

Technology Innovators: The portfolio swapped out chip names on Thursday as Brian does a little fine-tuning. The editor sold Semtech (NASDAQ:SMTC (NASDAQ:SMTX)) for a nearly 21% return in a little over two months, and replaced it by adding FormFactor (FORM). The new buy is an OEM of automated wafer probe cards that are used in the back-end portion of the semiconductor manufacturing process. FORM has beaten the Zacks Consensus Estimate in each of the past four quarters with an average surprise of 28%. Rising earnings estimates have made it a Zacks Rank #1 (Strong Buy). Increasing margins should lead to higher EPS and a bigger multiple, which Brian believes will send FORM into the mid $30s. The service also sold the underperforming Simulations Plus (NASDAQ:SLP) position today. Read the full write-up for more specifics on today’s moves. By the way, this portfolio had the best performer of the day as Tesla (NASDAQ:TSLA) rose 6.56%.

Insider Trader: Shares of New Relic (NYSE:NEWR) sold off after its recent quarterly report, but this analytics and infrastructure software company is in a transition phase. It’s reducing products from 11 all the way down to 3 and introduced a new free tier. Apparently, the President & COO feels pretty good about these moves, because he bought 9,000 shares yesterday, which comes to about $510,000. Tracey sees this as a “confidence buy” and decided to add this name with the remaining 10% in cash. Therefore, this portfolio is now fully invested. The complete commentary has more specifics on this new addition.

All the Best,
Jim Giaquinto

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