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NASDAQ Soars 2.3% as Week Ends with Back-to-Back Gains

It was certainly a rough week for stocks, but we all know how much worse it could’ve been without these past two days of gains. In the end, rising inflation definitely unnerved the market, but it didn’t panic.  

Tech had a real nice rebound today, sending the NASDAQ screaming higher by 2.32% (or just about 305 points) to 13,429.98. The index was off 2.4% this week, but that’s rather impressive since it plunged by more than 2% twice in the past four days.

Big tech had a big bounce with each of the FAANGs solidly higher, especially Facebook (FB) jumping 3.5%. Alphabet (GOOG), Apple (AAPL) and Amazon (AMZN) each climbed 2% or more. And Microsoft (MSFT) got in on the fun with a rise of 2.1%.

The S&P increased 1.49% to 4173.85 and the Dow advanced 1.06% (or around 360 points) to 34,382.13. These indices were off 1.4% and 1.1%, respectively, over the five days.

The major news this past week was about rising inflation. On Wednesday, the CPI stated that consumer prices soared 4.2% in April, which was well ahead of expectations at 3.5%. Unsurprisingly, that session marked the worst day of the week for stocks. And then the PPI was higher than expected on Thursday.

But there are plenty of positive things for the market to focus on, such as an economy about to reopen and a vaccine rollout that’s running on all gears. And let’s not forget the earnings season!

More than 90% of S&P companies have reported with total earnings up more than 46% and revenues higher by 9.5%. Check out all the data in Director of Research Sheraz Mian’s new Earnings Preview article.

And there’s still some big names coming to the plate next week, including Walmart (WMT), Home Depot (HD) and Macy’s (M) on Tuesday; Cisco (CSCO), Lowes (LOW) and Target (TGT) on Wednesday; Applied Materials (AMAT) on Thursday; and Deere (DE) on Friday.

Today's Portfolio Highlights:


Surprise Trader:
Last night, department store giant Dillard’s (DDS) returned to profitability in its first quarter report and beat the Zacks Consensus Estimate by more than 400%! That makes four straight positive surprises. Total retail sales surged 73%. These results are probably a bit better than what the editor was expecting when adding DDS on May 5. The stock soared 22.8% on Friday, which was the best performance among all ZU names today. DDS is now the top performer in the portfolio with a rise of nearly 20% in just a week-and-a-half.

Marijuana Innovators: The earnings report for Aurora Cannabis (ACB) was “dismal”, but fortunately shares were only off slightly. Dave considers that to be a “gift” because he can sell this medical cannabis company and still get a 39.7% return in a little over six months. Get more details in the complete commentary.

Counterstrike: “Next week we will see if the sellers show up again or all-time highs can be hit once more. My charts are telling me to be cautious, but if the SPX gets back over 4200, its hard to be bearish. And in the Nasdaq break the 50-day resistance, the tech selling might be over.

“This action is really tough as there are mixed signals all over. One day feels like the end of the world and the next feels like the 'Up Only' crowd is back. Inflation is still out there, but the market just didn’t care about that today.

“I’m pretty shocked at this quick snap back, but we called this price last night. The algos just love trading to these technical levels and they wasted no time. I expect the market to find some selling again next week, but this bid was so resilient that the pace might be much slower.”
– Jeremy Mullin

Have a Great Weekend!
Jim Giaquinto

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