S&P Joins NASDAQ at New Highs After Infrastructure Agreement

·6 min read

A possible infrastructure deal got the major indices moving higher again on Thursday, helping the S&P to finally reach a new record. Meanwhile, stocks seem poised for solid weekly totals heading into Friday’s session.

Let’s not get too excited about this infrastructure thing just yet. We know how Washington can be. Basically, the White House and a bipartisan group of senators have agreed on something. We still don’t know all the details or how it will be funded. We don’t even know if the plan will pass. However, it’s progress… and that was good enough for the market today.

The NASDAQ just finished its third straight day in record territory, jumping 0.69% (or about 98 points) to a new high of 14,369.71. And the S&P is back to making history as well. The index rose 0.58% to 4266.49, which marks its first closing record high since Monday, June 14. The Dow jumped 0.95% (or around 322 points) to 34,196.82.

All of these indices are up more than 2% for the week heading into Friday’s session, which means it has a good chance to recover from last week’s losses stemming from the Fed announcement.

The jobless claims report was very similar to last time. The print showed 411,000 claims, which was only modestly better than the previous week’s upwardly-revised 418K. However, it missed expectations of around 380K.

Other bits of economic data on Thursday included durable goods, which jumped 2.3% in May for a nice rebound from April’s plunge. However, it also missed expectations. But preliminary GDP was unrevised and right on target at 6.4%.

“This all backs the idea that the economy isn’t too hot yet and the Fed can wait to taper and raise rates. This Goldilocks environment pleases the bulls,” said Jeremy Mullin in Counterstrike.

And we’re not done with the data this week. Tomorrow comes the  personal consumptions expenditures report, which soared by more than 3% last time. However, the market took the print in stride as they feared much worse. The report is expected to show another sharp increase on Friday, so it’ll be interesting to see how investors react this time.

Today's Portfolio Highlights:  

Blockchain Innovators: It probably wouldn’t take many guesses to figure out what Benefitfocus (BNFT) does. It's a technology platform that simplifies benefits administration for employers, health plans and brokers. The company recently announced major expansions to its platform through artificial intelligence. So BNFT has been using blockchain for a while and looks to employ even more of it in the future. This Zacks Rank #2 (Buy) beat the Zacks Consensus Estimate in each of the last three quarters, and is expected to grow earnings more than 34% this year and over 46% next year. Dave added BNFT on Thursday, while also selling Net 1 UEPS Tech (UEPS) after several months of negative action. The complete commentary has more on today’s moves.

Commodity Innovators: The portfolio swapped a couple energy positions on Thursday. First of all, Jeremy sold Devon Energy (DVN) after its Zacks Rank fell. Shares have bounced back a bit from a selloff, so this was a good time to sell the name for a 33.4% profit in less than three months. The new addition is Schlumberger (SLB), a Zacks Rank #1 (Strong Buy) oil services leader. The company beat the Zacks Consensus Estimate by 10% back in April and is benefiting from the rising price of oil. In fact, if oil gets up to $100, the editor thinks that SLB will make new highs rather quickly. Read the complete commentary for more.

Options Trader: For the third time this year, Kevin is pulling profits and repositioning his options in Nasdaq (NDAQ). The editor sold to close the September 165.00 Call for a 137% return and bought to open a September 180.00 Call. As subscribers know, the editor calls this a “free trade” since the original principal is now safe with still tons of potential for profit moving forward. But that’s not all. Kevin also bought to open a December 540.00 Call in Thermo Fisher Scientific (TMO) and bought to open an October 105.00 Call in Floor & Décor Holdings (FND). TMO looks like it may finally be ready to breakout of a large bullish flagging pattern, while FND is a Zacks Rank #1 (Strong Buy) with projected sales and EPS growth of more than 34% and 54%, respectively. Read the full write-up for more specifics on these moves.

TAZR Trader: Don’t count C3.ai (AI) out! This software company was a high-flying IPO last year... and then it “crashed and burned like Icarus”. However, CEO Thomas Siebel knows how to build an innovative tech company and has designs to make this name a global leader in enterprise artificial intelligence software for accelerating the digital transformation. It’s fiscal fourth quarter results from earlier this month shows it’s on the right track. Revenue rose 26% year over year, while subscription revenue advanced 17%. AI is also very attractively priced for a company with sales growth expectations of 33.5% this fiscal year and another 32.5% for next. The partnership with data cloud company Snowflake is a nice move for the future as well. Read the full write-up to learn a lot more about AI, including Siebel’s ambitions moving forward and the “recalibration’ of analysts. In other news, this portfolio had two of the best performers among all ZU names on Thursday as The Trade Desk (TTD) rose 16% and Magnite (MGNI) advanced 8.2%.

Technology Innovators: Shares of NVIDIA (NVDA) have been on a solid run... and Brian doesn’t think it’s over. The portfolio needs some big-cap exposure, so he added this Zacks Rank #2 (Buy) graphics chip pioneer on Thursday. However, the editor sees NVDA as a broad-based computing powerhouse that goes far beyond chips. The company has beaten the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 12%, while the topline is expected to grow 48% this year and 10% in fiscal 2023. There’s a 4 for 1 stock split coming up in about a month. Meanwhile, the service also sold Cornerstone OnDemand (CSOD) for a more than 16% return in a little over six months and Vishay Intertechnology (VSH) for a loss. Read the full write-up for more on today’s action. In addition, this portfolio had a top performer today as Criteo S.A. (CRTO) advanced 12.3%.

Until Tomorrow,
Jim Giaquinto

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