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First Positive Session of 2021

SPECIAL ALERT: The January episode of the Zacks Ultimate Strategy Session will be available for viewing no later than Wednesday, January 13. Kevin Matras, Sheraz Mian, Kevin Cook and Dr. John Blank will cover the investment landscape from several angles in this popular event.

Don’t miss your chance to hear:

▪ Sheraz and John Agree to Disagree whether a Bullish Growth Surprise will emerge in 2021

▪ Kevin Matras answers your questions in Zacks Mailbag

▪ Sheraz and Kevin Cook choose one portfolio to give feedback for improvement

▪ And much more

Remember, we need your input. Please submit your questions for Zacks Mailbag and Portfolio Makeover by Thursday morning, January 7. Email now to mailbag@zacks.com.

Then log on to Zacks.com and bookmark this page.

SPECIAL ALERT #2: We’ve just released this quarter’s Ultimate Four report which includes four stocks our team believes have the greatest upside potential over the upcoming quarter. This latest report features favorite stocks from Jeremy Mullin, Tracey Ryniec, Brian Bolan and Madeleine Johnson. Log on to Zacks.com to see these stocks today.


The market recovered some of yesterday’s losses on Tuesday, as the major indices finished on positive ground amid a solid manufacturing report and uncertainty over control of the Senate.

The NASDAQ jumped 0.95% (or about 120 points) today to 12,818.96. Meanwhile, the Dow was up 0.55% (or around 167 points) to 30,391.60 and the S&P rose 0.71% to 3726.86.

These gains are just a drop in the bucket compared to Monday’s slide of more than 1%, but it is the first green of 2021.

It also ends the “Santa Claus Rally” period, which encompasses the final five sessions of the old year and the first two of the new. Stocks are up over that time, but less than the historical average of about 1.3%.

We enjoyed some good news from the ISM Manufacturing report on Tuesday, which climbed to 60.7 in December. That’s better than November’s 57.5.

It also marks the eighth straight month of growth, which is determined by a reading over 50.

It’s a welcomed piece of data at a time when the market is extremely nervous over the rise in coronavirus cases, exemplified most recently by the U.K.’s decision for a national lockdown amid the more contagious Covid variant.

The biggest report of the week, though, will be Friday’s Government Employment Situation. Last month’s was a bit of a disappointment.

All eyes will be on the Georgia runoffs tonight, as they will determine control of the Senate. If the Republicans can win one of the two contests, then they’ll keep control.

If the Democrats win both, they will have control of the Executive and both houses of the Legislative branch. The market isn’t crazy about this scenario as it will likely mean higher taxes, but it would also mean more stimulus.

Let’s see what happens...

Today's Portfolio Highlights: 

Surprise Trader: Earnings season is right around the corner, so get ready for a lot of action from Dave. He kicked things off on Tuesday by adding beverage name Constellation Brands (STZ), which is currently the third largest beer company in the U.S. It beat by nearly 10% last time, and now has a positive Earnings ESP of 0.71% for the quarter coming before the bell on Thursday, January 7. The editor added STZ today with a 12.5% allocation. He also sold Construction Partners (ROAD) and Toro (TTC) for gains of 4.3% and 2.3%, respectively, to make room for new positions as earnings season heats up. Read the full write-up for more.

Stocks Under $10: The first moves of 2021 for this portfolio include adding two names and cashing in a double-digit profit. The new buys are Cassava Sciences (SAVA) and Orbcomm (ORBC), which are both Zacks Rank #2s (Buys). SAVA is focused on the early detection and treatment of neurodegenerative diseases, such as Alzheimer's. Brian is most impressed with this company’s expected swing to profitability this year. ORBC is a satellite play that has beaten the Zacks Consensus Estimate in three of the past four quarters and is bouncing back nicely today after yesterday’s decline. The editor also sold Diebold Nixdorf (DBD) for a nice 45% return in about five months. See the full write-up for more on all of today’s moves.

Zacks Short Sell List: The portfolio made four changes on Tuesday in its first adjustment of 2021. The stocks that were short-covered included:

• Las Vegas Sands (LVS)
• Visa (V)
• ConocoPhillips (COP)
• Intuit (INTU)

The new buys that replaced these names were:

• BioMarin Pharmaceutical (BMRN)
• Marriott Int'l (MAR)
• Pinduoduo (PDD)
• Southwest Airlines (LUV)

Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.

Until Tomorrow,
Jim Giaquinto

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