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NASDAQ, S&P Back at Record Closing Highs

The major indices added another 1% on Thursday and moved into Friday’s session with robust gains for the first week of February… along with a couple new all-time records as well.  

The NASDAQ returned to form today by jumping 1.23% (or about 167 points) to 13,777.74. Uncharacteristically, the index slipped 0.02% yesterday while its counterparts continued to advance. But now it’s back at an all-time closing high.

The S&P also made history by gaining 1.09% to its own new record of 3871.74. The Dow advanced 1.08% (or around 332 points) to 31,055.86. Both of these indices now have four-day winning streaks.

Investors enjoyed another encouraging jobless claims report this week with a tally of 779,000, which was below expectations of well over 800K. Perhaps more importantly, this was the third straight week with a better-than-expected result.

As encouraging as that trend is, investors are most interested in the Government Employment Situation report coming tomorrow. Last month’s print was rough with the economy losing 140K jobs in December while a gain of 50K was expected. The expectation is 50K again for January.

We’ve enjoyed some good jobs numbers of late. In addition to today’s jobless claims, Wednesday’s ADP employment report crushed expectations with private payrolls adding 174K. However, these reports aren’t necessarily harbingers of the BLS number.

But does it really matter to the market? Stocks rose in the same session of that big miss last month because investors saw more proof for stimulus. And the market is just as interested in more stimulus today as it was then.

Plus, sentiment is pretty positive right now. Earnings season has been strong and SqueezeMania appears to have simmered down significantly. And now stocks are back at all time highs while we wait for the vaccines to take hold.

The NASDAQ is up more than 5% for the week heading into Friday, while the S&P is over 4% and the Dow is over 3%, which means stocks have recovered all of last week’s slide. Let’s see if we can add more tomorrow regardless of what the jobs report says.

Today's Portfolio Highlights:

Healthcare Innovators: Shares of Anavex Life Sciences (AVXL) have been soaring since the portfolio added this emerging biopharma back in June. Kevin still likes the company, but feels its stock is rising due to the squeeze-a-palooza and not new data or pipeline advances. Therefore he sold AVXL on Thursday for a nice return of at least 300% in less than eight months, while also buying two other names.

The editor picked up Dynavax (DVAX), a provider of vaccine adjuvants (molecular aids for immunogenicity). The company has enjoyed a lot of good news lately. For example, DVAX and Clover Biopharmaceuticals announced a global Phase 2/3 efficacy trial of its adjuvanted covid vaccine candidate. The other buy is Arbutus Biopharma (ABUS), a HIGHLY SPECULATIVE small-cap biotech that uses RNA-interference technology to tread chronic hepatitis B infection. The editor has been watching this stock for a while now, and finally made the move after reading one of his favorite analysts. But remember to proceed according to your allocation of risk capital. Read the full write-up for a lot more about today’s moves.

Surprise Trader: The past two quarterly surprises have been huge for Bunge Limited (BG). Dave thinks there’s a pretty good chance that this Zacks Rank #2 (Buy) agribusiness and food company manages to top expectations for a third straight quarter. It has an Earnings ESP of 3.09% for the report coming before the bell on Wednesday, February 10. The editor added BG on Thursday with a 12% allocation, while getting out of Evoqua (AQUA) for a slight loss. See the complete commentary for more on today’s moves.

Commodity Innovators: We’re getting ready for some frigid temperatures here in the Midwest, which has natural gas bulls buying despite record levels of inventories. Jeremy wants to get involved, so he added ProShares Ultra Bloomberg Natural Gas (BOIL) on Thursday. This investment moves 2X the daily natural gas move. The editor is going to keep a “tight leash” on this one though, since this commodity is known for being volatile. He considers it a short term move. The portfolio also sold the underperforming Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG) position. See the complete commentary for more.

Blockchain Innovators: This portfolio had the two best performers of the day among all ZU names... and they were both up in the double digits. Those big winners were Digi Int'l (DGII, +15.5%) and Danaos Corp. (DAC, +13.6%). Actually, Dave's service had three of the Top 5 movers on Thursday as A10 Networks (ATEN) also made the list with a more modest 8.6% advance.

All the Best,
Jim Giaquinto

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