Record-Setting Pace Cools Off after Fed Minutes

Everything was moving along nicely on Wednesday with the S&P and NASDAQ on their way to another round of new highs, but then the Fed provided this hot market with an excuse to cool off.

According to the minutes for the July meeting, this pandemic will “weigh heavily” on the economy in the near term… and possibly in the medium term.

Normally, we’d just file this under “duh” and move on. However, it carries more weight coming from the Fed, especially since Powell & Friends are a major reason why the S&P has soared 50% from its coronavirus low.

With that index reaching a new closing high just yesterday and rising less than a point from 3400 today, the rather obvious forecast from our central bank was enough for stocks to simmer down in the afternoon.

The Dow declined 0.31% (or about 85 points) to 27,692.88, while the NASDAQ ended lower by 0.57% (or about 64 points) to 11,146.46 after back-to-back sessions of new highs.

If the S&P gained today – even fractionally – it could have boasted another new closing high, but it didn’t. The index slipped 0.44% to 3374.85.

However, before the late move lower, the S&P did set a new intraday high of 3399.54. That’s less than half a point from its next psychological milestone.

Besides the Fed, there were some other big stories on Wednesday.

Apple (AAPL) became the first company with a $2 Trillion market cap, though it finished the session higher by only 0.13%. It doesn’t seem that long ago when the iPhone maker became a $1 Trillion company… and that’s because it wasn’t that long ago!

It was actually this month back in 2018 when it became the first member of the trillion-dollar club. Yeah… a trillion dollars in only two years!

And then there was the epic second-quarter report from Target (NYSE:TGT). In addition to easily surpassing expectations on the top and bottom lines, the discount retailer reported comparable store sales of 24.3%. That was more than four times better than expectations!

Shares soared 12.65% on the day. So it didn’t move lower after a strong quarter like Walmart (NYSE:WMT) and Home Depot (NYSE:HD) did yesterday… of course, they didn’t have as impressive a quarter as TGT.

In other earnings news, NVIDIA (NASDAQ:NVDA) is trading lower afterhours despite a solid report (down by more than 1% as of this writing), while Lowe’s (NYSE:LOW) managed a 0.23% advance after beating on both the top and bottom lines.

Today’s Portfolio Highlights:

Home Run Investor: The goal of this portfolio right now is to “stick with the winners”, which was exemplified today when Brian added Advanced Drainage Systems (NYSE:WMS). The company provides a comprehensive suite of water management products and drainage solutions for use in the construction and infrastructure marketplace. The editor noticed that this stock always seems to pop up on the list of new 52-week highs. It beat by 27% in its most recent earnings report. Furthermore, rising earnings estimates for this year and next have lifted WMS to Zacks Rank #1 (Strong Buy) status. Meanwhile, the service also cashed in a couple profits on Wednesday by selling El Pollo Loco Holdings (LOCO) and CyberOptics (CYBE) for gains of nearly 11% and about 5.2%, respectively. Read the full write-up for a lot more on today’s moves.

Healthcare Innovators: This portfolio pulled double-digit returns out of Crispr (CRSP) THREE times in the recent past. And now you can make it four! With shares soaring today and the stock having reached all “reasonable” price targets; Kevin decided to sell this gene editing company and collect a 69.1% profit in seven months. But that wasn’t all. The editor also sold genetic testing company Natera (NASDAQ:NTRA), which jumped this week after a positive critique on its non-invasive prenatal testing. However, it will be a slow release for these services. Therefore, Kevin decided to take the 41.8% return in less than two months for his second double-digit winner of the day. Read the full write-up for a lot more on the reasons behind these moves.

Blockchain Innovators: Shares of SharpSpring (NASDAQ:SHSP) have been on the rise since last week’s quarterly report, which included a positive surprise of 70%. This Zacks Rank #2 (Buy) provides cloud-based marketing automation, and its partners use blockchain credential and verification to increase the security and transparency of the platform. EPS and revenue growth for this year and next are all expected to soar in the double digits. Best of all, SHSP remains well off its $20 high from a year ago, so there’s plenty of ground to recover moving forward. The portfolio added SHSP on Wednesday, while also selling Stratasys (NASDAQ:SSYS). Read the complete commentary for more on today’s moves. By the way, this portfolio had a couple top performers today with Net Element (NETE) rising more than 9% and Exp World Holdings (EXPI) up 8.45%.

Income Investor: This portfolio had the best performing stock of the day… and you probably don’t have to look at the scoreboard above to figure out the winner. Yep… it was Target (TGT), which just released what may very well be the most impressive report of this earnings season. The discount retailer blew the doors off the expectations, especially comparable sales soaring 24.3%. More specifically, digital comparable sales skyrocketed by 195% while store comparable sales were up 10.9% during a pandemic. The stock advanced 12.65% today and is up nearly 40% in the portfolio since being added last November.

Have a Good Evening,
Jim Giaquinto

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