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Stocks Still Stinging from Soft Jobs Report

SPECIAL ALERT: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Thursday, September 9. Kevin Matras, Kevin Cook, Daniel Laboe, Dr. John Blank and Sheraz Mian will cover the investment landscape from several angles in this informative event.

Don’t miss your chance to hear:

▪ Kevin Cook and John Agree to Disagree on where the S&P 500 will end in 2021
▪ Kevin Matras answers your questions in Zacks Mailbag
▪ Sheraz and Daniel choose one portfolio to give feedback for improvement
▪ And much more

So be sure to mark your calendar then log on to and bookmark this page.

The three-day, Labor Day weekend didn’t soothe investors’ minds regarding last Friday’s disappointing jobs report, leaving two of the major indices with a second straight session of losses to begin this abbreviated week. However, the NASDAQ managed a slight advance yet again.

The Dow dropped by 0.76% (or nearly 270 points) to 35,100, while the S&P was off 0.34% to 4520.03. These indices were at record highs last Thursday before the Government Employment Situation report, but now have back-to-back losses.

But the NASDAQ managed a small rise just as it did before the long weekend as investor reach out for safer names. This time, it advanced 0.07% (or nearly 11 points) to 15,374.33.

The market remains a bit disheartened from Friday’s surprisingly soft jobs report. The economy added only 235,000 jobs in August, compared to expectations for as much as 720K. It’s all the more of a letdown since the July report showed nearly a million new jobs.

Adding to the concern, Goldman Sachs downgraded estimates for U.S. growth in 2021. The firm now forecasts 2021 GDP at 5.7% instead of 6.2%. The fourth quarter was pulled back to 5.5% from 6.5%. While the delta setback is expected to be brief, they still believe it can negatively impact fully re-opening the economy and getting back to normal.

“Now that summer is technically over, we should start to see bigger moves and less chop,” said Jeremy Mullin in Counterstrike. “Economic data and earnings are light this week, so don’t expect things to pick up that quickly. Instead, we will likely see volume, ranges and volatility pick up as we approach earnings season.”

Today's Portfolio Highlights:

Marijuana Innovators: The marijuana space has been tough in 2021, but the global software market is booming. New editor Ben Rains found a way to gain exposure to the latter while waiting for the former to get going. On Tuesday, he picked up Akerna Corp. (KERN), a cannabis industry software company with enterprise solutions that help marijuana companies comprehensively track data on nearly every aspect of the business from seed to sale. It also works with governments, since keeping track of the product could go a long way in legalization and regulation. Read the full write-up for a lot more on today’s addition of KERN.

Stocks Under $10: With oil prices pulling back amid a Saudi price cut, Brian is expecting good things for shipping names. That’s the point behind Tuesday’s addition of Pangaea Logistics (PANL), which has seven Supramax ships, three Ultramax, nine Panamax, two Post Panamax and a Barge. That’s a lot of tonnage! The port lockdown in China will also increase shipping rates. PANL is a Zacks Rank #2 (Buy) that has beaten the Zacks Consensus Estimate for three consecutive quarters now. In the most recent quarter, sales growth surged 106%. The editor also appreciates its valuation, especially the stock trading at 4.8x forward earnings with a price-to-book of 0.94x. Read the complete commentary for more on today’s addition of PANL.

Surprise Trader: Who wouldn’t want to eat good food, play a video game and watch a sporting event all at the same time? That’s what Dave & Busters (PLAY) is all about. Its no wonder that the company has beaten the Zacks Consensus Estimate for four straight quarters. And now it has a positive Earnings ESP of 21.65% for the quarter coming after the bell on Thursday. Dave thinks this “Eat, Drink, Play & Watch” name is set to beat again, so he added PLAY on Tuesday with a 12.5% allocation. The editor also sold Oxford Industries (OXM) in order to “liquidate positions that are heading sideways and let some of the winners run”. Learn more about today’s moves in the complete commentary.  

Zacks Short Sell List: The service replaced two names in this week's adjustment. The stocks that were short-covered included CoStar Group (CSGP) and Canada Goose (GOOS), while the new buys that filled the open spots were Amazon (AMZN) and Yandex N.V. (YNDX). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.

Black Box Trader: This week's adjustment (which is coming a day late due to the Labor Day holiday) replaced a majority of the portfolio and cashed in a double-digit winner. The SEVEN stocks that were sold on Tuesday included:

• Option Care Health (OPCH, +28.5%)
• Tempur Sealy (TPX, +6%)
• DICK'S Sporting Goods (DKS, +1.6%)
• Capri Holdings (CPRI)
• HCA Healthcare (HCA)
• Chubb Ltd. (CB)
• AutoNation (AN)

The new buys that re-filled the service are:

• American International Group (AIG)
• Deere (DE)
• Range Resources (RRC)
• Realogy Holdings (RLGY)
• Sonos (SONO)
• TJX Cos. (TJX)
• Toll Brothers (TOL)

Read the Black Box Trader’s Guide to learn more about this computer-driven service.

All the Best,
Jim Giaquinto

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