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NASDAQ Manages to Advance in Slow Start to the Week

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The ‘goldilocks’ jobs report from last Friday didn’t have much follow through on Monday, as stocks were mixed with only the NASDAQ managing to stay positive in the wake of a short yet solid weekly performance.   

The tech-heavy index advanced 0.49% (or about 67 points) to 13,881.72. The NASDAQ surged by nearly 1.5% on Friday, finishing off its third consecutive week in the green with a gain of 0.5% for the four days.  

Meanwhile, the S&P was off 0.08% to 4226.52, while the Dow slipped 0.36% (or around 126 points) to 34,630.24. These indices advanced 0.6% and 0.7%, respectively, last week.

“Sleepy sessions are going to be the name of the game for the market in the summer. That does not mean the moves won’t add up to anything,” said Dave Bartosiak in today’s Surprise Trader. “Rather, I expect volatility to reel in a bit as stocks generally drift higher. No real upside catalysts, no huge downside risks, low news flow should all be reasons for a slow grind higher.” (More from Dave below).

We’re just one trading day removed from a perfectly placed jobs report, which said the economy added 559K jobs in May. The result marked a significant improvement over the previous month’s 266K, but was below expectations of around 650K.

For investors concerned that an overheated economy may force the Fed’s hand sooner rather than later, it was the perfect way to head into the weekend. The recovery is strong… but not too strong.

Unfortunately, the good times didn’t transfer over into Monday, which leaves the S&P and Dow still tantalizingly close to new all-time highs. There aren’t many catalysts on the horizon as the summer begins, but the indices are so close that even a lazy drift higher could make history. Let’s see what the rest of the week has in store for us.

Today's Portfolio Highlights:

Marijuana Innovators: The portfolio added Jazz Pharmaceuticals (JAZZ) to begin the week. This Irish pharmaceutical company specializes in the areas of sleep and hematology/oncology. Read the complete commentary for the whole story on JAZZ, including its “compelling cannabis angle”.

Healthcare Innovators: The reasons to buy Moderna (MRNA) back in mid-December were obvious with this company on the verge of an emergency use authorization from the FDA for its coronavirus vaccine. Kevin is still a big believer in this innovative messenger-RNA technology company, but it has succeeded so well on the covid front that earnings will likely trend lower into next year as the vaccine market is saturated. MRNA will have to work on the next generation of mRNA medicines to prompt another upswing. The editor thought it was time to sell MRNA for a nice 56.8% return in just about six months.

Headline Trader: Shares of Equinix (EQIX) surged more than 9% in just four days after this data center REIT announced plans for a new data center facility in Silicon Valley. Dan thinks the name is overbought and due for a break right now, so he scaled out of 44% of the EQIX position for a nearly 23% return in less than three months. The editor will be hanging onto the rest of the position for now since he’s still a big believer in the need for data center expansion during the “4th Industrial Revolution”, but that could change if the stock continues drifting past his price target. Read the full write-up for more.

TAZR Trader: This portfolio had two double-digit gainers on Monday. The big winner was Magnite (MGNI), which was the best performer among all ZU services today with a surge of nearly 13%. The other noteworthy result came from BigCommerce Holding (BIGC). The stock was up 10.3% today and has advanced more than 39% over the past 30 days.

Black Box Trader: This week's adjustment included three changes. The stocks that were sold included:

• Bloomin' Brands (BLMN)
• Berry Global Group (BERY)
• Sally Beauty (SBH)

The new buys that replaced these names were:

• Abercrombie & Fitch (ANF)
• DICK'S Sporting Goods (DKS)
• Target (TGT)

Read the Black Box Trader’s Guide to learn more about this computer-driven service. By the way, this portfolio had a top performer on Monday as Cornerstone Building Brands (CNR) jumped 11.9%.

Surprise Trader: "With the first Monday of Summer officially on the books, investors are getting a taste of the trading environment. For the next month or so, earnings will dwindle down to a drip, news flow will slow, and stocks will start the grind.

"Stocks will have a tendency to inch one way or another on low volume while the market looks for the next catalyst. While earnings season will be back in full swing before you know it, do not expect to see huge market moves for the next few weeks. Every once in awhile you'll see a big move, but for the most part, it's going to be a bit stagnant.

"Inflation will continue to be the buzzword that weighs on minds but we will probably find out that it's actually good for stock prices. Should the price of everything continue to tick higher, stocks will follow the same path."
-- Dave Bartosiak

All the Best,
Jim Giaquinto

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