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Dow Joins the Record-Setting Pace

SPECIAL ALERT: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, February 10. Kevin Matras, Sheraz Mian, David Bartosiak and Daniel Laboe will cover the investment landscape from several angles in this informative event.

Don’t miss your chance to hear:

▪ Sheraz and David Agree to Disagree on Reddit Wall Street bets and whether they’re good or bad for the market
▪ Kevin answers your questions in Zacks Mailbag
▪ David 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.

Stocks got right back to rallying to begin the second week of February, and this time ALL the major indices managed to finish the session with new highs.

The NASDAQ, which soared by 6% last week, tacked on another 0.95% (or about 131 points) to 13,987.64. The S&P rose 0.74% to 3915.59 after jumping 4.6% last week. These indices have each put together three straight days of record highs.

But on Monday the Dow joined in on all the fun too. The index rose 0.76% (or around 237 points) to 31,385.76, marking its first record close since January 20. The index advanced 3.9% last week.

And let’s not forget that the Dow and S&P each have six-day winning streaks now, which means they have yet to see a negative close this month.

We’ve got nearly 900 earnings reports on tap this week. With more than half of the season over and growth returning a quarter earlier than expected, earnings are a big reason why stocks are rallying right now. But it’s probably not the main catalyst.

The Administration’s $1.9 trillion stimulus package is making its way through Congress and probably won’t need any support from Republicans, which was why the market was so happy that Democrats took control of the government in the recent elections. The quicker consumers get the money, the better.  

The big news today, though, was Tesla (TSLA) buying $1.5 billion worth of Bitcoin and saying that it will soon accept the cryptocurrency as payment. Needless to say, Bitcoin soared to all-time highs over $45K.

“Tesla has so many eyeballs on it that this idea of Bitcoin on the balance sheet could go from a wacky trend, to the prudent thing to do,” said Jeremy Mullin in today’s Counterstrike. “This is a paradigm shift in how corporations manage their balance sheet and you better believe every single S&P company is looking at this right now.”

For more on this important story, check out Dave Borun's article titled: "The Tesla Investment is Important for Cryptocurrencies".

Looks like we’re in store for another busy week. Let’s see what happens tomorrow...

Today's Portfolio Highlights:

Surprise Trader: If you want to lift something really really heavy, then you call on Terex (TEX). The company is a global manufacturer of aerial work platforms, materials processing machinery and cranes. Dave is especially impressed with next year’s earnings estimates, which have jumped to $1.75 from $1.24 in the past 60 days on expectations for more construction after the pandemic. For right now though, TEX has a very healthy Earnings ESP of 1900% for the quarter coming after the bell on Thursday, February 11. The editor added TEX on Monday with a 12.5% allocation, while also selling CommVault (CVLT) for a nice return of more than 14% in less than three weeks. Read the full write-up for more on today’s moves.

Home Run Investor: Shares of Perion Network (PERI) had such a nice session on Monday that Brian couldn’t resist the temptation to cash in a double-digit winner in just a month’s time. Therefore, he sold this provider of online advertising solutions and search monetization for a profit of approximately 60%. Plus, it frees up a spot for a new addition on Wednesday.  

Black Box Trader: Four stocks left the portfolio in this week's adjustment and three of them were positive, including a double-digit return. The names that were sold today included:

• Interpublic Group (IPG, +11.5%)
• Huntsman (HUN, +8.5%)
• Omnicom Group (OMC, +7%)
• Target (TGT)

The new buys that replaced these names were:

• Abercrombie & Fitch (ANF)
• Flex Ltd. (FLEX)
• Ford (F)
• Vista Outdoor (VSTO)

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

Options Trader: "Same story as last week - strong earnings are propelling stocks higher as well as the prospect for more vaccines, more vaccinations, and more and more big cities easing restrictions and allowing businesses to open which is expected to unleash huge pent-up demand.

"And so is the expectation for more stimulus. The $1.9 trillion working proposal has already cleared some procedural hurdles in Congress, and it looks like something big in that price range is likely to happen by mid-March or sooner. That's a lot of extra money that will be spent and it will spur on lots of economic growth.

"As I've been saying, what we're seeing right now in the economy and the market is history in the making. And historic times typically usher in historic prices moves.

"And it looks like there's a lot more upside to go."
-- Kevin Matras

Until Tomorrow,
Jim Giaquinto

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