And Now the Dow Makes History as Rally Hits Four Days

The NASDAQ reached a new high on Tuesday, the S&P followed it into record territory on Wednesday, and now the Dow joined its counterparts on Thursday!  

Stocks just completed their fourth straight session of sharp gains as the indices fully recovered from the recent coronavirus selloffs and set up the possibility for an epic first week of February.

The Dow fell just short of a fourth straight triple-digit gain, but settled for a new record with a rise of 0.30% (or nearly 89 points) to 29,379.77. That’s over 1100 points added so far this week… and there’s one more day to go!

The NASDAQ was the best performing index again after taking a break yesterday due to a double-digit decline for Tesla. The electric car company was back in the green by nearly 2% today, allowing this index to rise unfettered by 0.67% (or more than 63 points) to 9572.15.

The S&P rose 0.33% to 3345.78. Needless to say, this index and the NASDAQ were already at their highs when the day began, so they both reached new records along with the Dow.

We had a blast from the past on Thursday with some trade news, as China announced that it would be cutting tariffs by half on approximately $ 75 billion of U.S. imports as part of the Phase 1 trade deal.

Meanwhile, the market continues to shrug off the coronavirus, even though its still spreading. And earnings season remains solid with approximately 70% of the S&P companies beating earnings estimates so far.

One of the big performers today was Twitter, which soared more than 15% after reporting strong revenue and user numbers in its fourth quarter.

Here we go! Stocks have a nice set up for a very strong week heading into Friday. Through the first four days, the NASDAQ is up 4.6%, the Dow is up about 4% and the S&P has gained 3.7%.

This comes after coronavirus fears ruined last week with an especially sharp selloff on Friday.

One of the big deciding factors tomorrow could be the Government Employment Situation report. Last month, the number missed expectations by about 15,000, but the market wasn’t punished as unemployment remains at historic lows.

Today's Portfolio Highlights:

Income Investor: Now that the Phase One trade deal with China is done, things are looking a lot less volatile for semiconductor manufacturer Broadcom (AVGO). Shares have jumped around 17% over the past six months, while sales and earnings are expected to rise 11% and 9%, respectively, in fiscal 2020. The company is gearing up for the launch of Apple’s 5G iPhones later this year, but Maddy notes that its not entirely dependent on Apple as it also provides chips for Android smartphones and is venturing into tech infrastructure and security software. The editor really appreciates its cheap valuation and its “nice, juicy dividend”, which the company raises regularly. Read the complete commentary for more on this new addition.

Blockchain Innovators: Today’s addition touches on blockchain AND marijuana, two of the hottest corners of the market with tons of potential moving forward. GTY Technology (GTYH) is a special purpose acquisition company that includes a business unit called CityBase, which is an online recreational cannabis business licensing system. The company has already partnered with San Francisco and will be using blockchain to keep tabs on everything. Read the complete commentary for a lot more on the addition of GTYH.

Surprise Trader: This portfolio has cashed in a few 10%+ winners this earnings season, and it did so again on Thursday by selling half of Adient (ADNT) for a 43.3% return. This automotive seating supplier was bought less than two weeks ago! The editor also added Manitowoc (MTW) today, which is a Zacks Rank #1 (Strong Buy) provider of engineered lifting solutions. Or as Dave puts it, the company is in the cranes business. This is about as quick a turnaround as you can get, as Dave picked this one up on the same day as its quarterly report. MTW has beaten for seven straight quarters and has an Earnings ESP of 32.14% for the quarter coming after the bell today. UPDATE: Make it 8 earnings beats in a row. Read the full write-up for more on this addition and its earnings report.

Technology Innovators: You can never have too many laser companies in a technology portfolio! On Thursday, Brian added nLight (LASR), a Zacks Rank #1 (Strong Buy) provider of high-power semiconductor and fiber lasers. The stock has been moving solidly higher in the past few days, leaving the editor to believe that someone wants a big position heading into LASR’s report on February 19. The portfolio also sold Alpha and Omega Semiconductor (AOSL). Read the full write-up for more on today’s moves.

Until Tomorrow,
Jim Giaquinto

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