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S&P Returns to Record Territory, but the NASDAQ Never Left

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The Fed doesn’t appear to be in any great hurry to raise rates despite the epic first half and strong employment reports of late. Therefore, stocks overcame some morning sluggishness to end Wednesday’s session higher and with a couple new records.

The consensus of FOMC members would prefer to stay the course for now, according to the minutes from the June meeting released today. The economy has been on a roll for months now, but there’s still a lot of ground to recover before changing policy.  

“They are talking about tapering, but the data isn’t clear enough to pull back yet,” said Jeremy Mullin in Counterstrike. “So we likely have until the end of the year until the Fed actually starts lifting its foot off the gas.”

The S&P returned to record territory today by climbing 0.34% to 4358.13, which marks its eighth new high in the past nine sessions. The index ended a seven-day winning streak yesterday, but the break didn’t last long.

Meanwhile, the NASDAQ inched out a 0.01% increase to 14,665.06, marking a third consecutive record close. The Dow rose 0.30% (or around 105 points) to 34,681.79, but that wasn’t enough to reach new highs.

Tech led the way once again just like yesterday. For the most part though, action has been rather quiet in this shortened week so far. Investors are getting ready for the start of earnings season, which unofficially gets underway with some big bank reports early next week. Are you getting excited? It's going to be tough to repeat the strong performances we saw last time.

More immediately though, it’s already time for the next jobless claims report. We got a lot of employment news last week… and it was mostly all encouraging (but not too encouraging). The last jobless claims print was 364K, which beat expectations and the previous result. It was also the first result below 400K since early June.

Hopefully, this positive trend continues tomorrow...

Today's Portfolio Highlights:

Home Run Investor: It's time to get back into shape now that things are opening up, which is why Brian believes BellRing Brands (BRBR) will have lots of business moving forward. This Zacks Rank #2 (Buy) makes protein shakes and other ready-to-drink beverages, powders and nutrition bars. The editor likes the “wonderful chart” with a pure 45-degree angle since April. Furthermore, BRBR beat the Zacks Consensus Estimate by 25% in its most recent report and has good margins. Brian wants to get in before Wall Street begins paying attention to the name, which could be right around the corner as earnings season begins. The portfolio still has one open spot after the addition of BRBR. Read the full write-up for a lot more on this addition.

Surprise Trader: It’s almost time for another earnings season, so Dave wants to clear out some space for new names. He sold Boot Barn Holdings (BOOT) on Wednesday for a 13.4% return in just under two months, while also getting out of Bed Bath & Beyond (BBBY) with a slight advance in about two weeks. The editor immediately filled one of those spots by adding BlackRock (BLK), the Zacks Rank #2 (Buy) investment management company that’s reporting before the bell on Wednesday, July 14. The company has beaten the Zacks Consensus Estimate for four straight quarters now and has a positive Earnings ESP for the upcoming report. BLK was added today with a 12.5% allocation. The complete commentary has more on all of today’s action.

Technology Innovators: The best performer among all ZU portfolios on Wednesday was Smart Global (SGH), which jumped 17.81% in the session. This designer, manufacturer and supplier of electronic subsystems to OEMs recently reported a solid fiscal third quarter, which included an earnings surprise over 26% and revenue growth of 56% year over year. That makes five quarters of positive surprises for SGH, which is now up about 20% in the portfolio since being added two months ago.

Counterstrike: With earnings season rapidly approaching, Jeremy wants to raise some cash and dump some losers. He did both on Wednesday. The big winner was Shopify (SHOP), which the editor added back in mid-May after it announced a partnership with Google. But now it’s stuck in a “massive reversal”, so the editor sold SHOP today for a nice 31.3% return in less than two months. He also sold Boyd Gaming (BYD) and Echo Global Logistics (ECHO) for losses to make some room for new buys in the days ahead.

Healthcare Innovators: It’s been over a year-and-a-half since Kevin added Edwards Lifesciences (EW)... and he still likes this heart valve replacer. However, the stock now exceeds most analyst price target valuations, so he decided to sell EW on Wednesday for a more than 41% return. It’s a different story though for Global Blood Therapeutics (GBT), which is down double digits since being added in 2018 despite its innovative science. The editor has been patient long enough with this name and finally decided to cut ties today. Read the full write-up for more on these two sells.

Marijuana Innovators: As parent company of the popular “Weedmaps” family of consumer services, Dave thinks that WM Technology (MAPS) has many ways to rapidly appreciate moving forward. Therefore, the stock was added to the portfolio on Wednesday. However, the editor warns that this is an extremely speculative play on a company that’s the result of a recent SPAC reverse merger. He suggests you tread very lightly in terms of asset allocation. Dave will lay out all the risks and rewards in today’s commentary, so don’t miss it!

TAZR Trader: Shares of C3.ai (AI) have been selling off of late, but Kevin said this slow pullback is on “low volume” and should find support around $58. Therefore, it’s an opportunity to buy more of this enterprise AI software company at a bargain price. The editor originally bought AI about two weeks ago after a solid quarterly performance and because CEO Thomas Siebel knows how to build an innovative tech company. Learn more in the full write-up. By the way, this portfolio had a top performer today as BigCommerce Holdings (BIGC) rose 5%.

Until Tomorrow,
Jim Giaquinto

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