A second week of decline as September continues
All hopes for a positive week were dashed on Friday as the September crisis continued and left each of the major indices with slight losses over the five days. And now the market is waiting to hear what the Fed has to say at its meeting next week.
The S&P slipped 0.91% today to 4,432.99, while the NASDAQ lost the same percentage (or nearly 138 points) to 15,043.97. The Dow Jones fell 0.48% (or about 166 points) to 34,584.88.
The indices actually entered Friday’s session with gains in the first four days. We enjoyed a decent rally on Wednesday (which has been rare this month) followed by only slight losses on Thursday. Even a mediocre lead could have sent investors into the weekend feeling pretty good, all things considered.
However, the performance mentioned above left the S&P and NASDAQ in the red by 0.6% and 0.5%, respectively, for the week. The Dow Jones was roughly at equilibrium, although technically down by less than 0.1%.
This results in back-to-back weekly losses for the indices, but the declines were much smaller than last week, when stocks were down more than 1.5%.
We’ve seen a fair amount of economic data over the past few days, which continued on Friday with the University of Michigan Consumer Confidence Index. The impression came in at 71, which was a bit better than the August number but below expectations of 72.
It was a similar idea to Tuesday’s CPI report and yesterday’s jobless claims. The results were slightly lower than expected but held up fairly well, suggesting an economic recovery that is holding up despite being impacted by the delta variant.
Meanwhile, Thursday’s retail sales data was downright strong, climbing 0.7% in August, compared to market expectations for a decline of 0.8%.
All of this will be taken into account at the Fed’s meeting next week. Investors will be watching for any announcements, or at least any clue, about the central bank’s timetable to curtail its asset purchase program. Has this recent data had an impact on their plans? We will find out on Wednesday.
Highlights of today’s portfolio:
Technological innovators: There are a lot of spots available in this portfolio right now, so Brian added for a second straight session today. It bought EchoStar (SATS) on Friday, a global operations provider of satellite services, video streaming services, broadband satellite technologies and broadband Internet services for individuals and small businesses. The company has an excellent earnings history with an average surprise of 187% over the past four quarters, while rising earnings estimates have pushed the stock to Zacks Rank # 2 (Buy) status. Brian thinks the valuation is “amazing” and really appreciates the margins jumping to a 2.1% gain after losing 2.2% in the last few quarters. Read more in the full commentary.
Counter Strike: Streaming staple Roku (ROKU) broke Zacks’ consensus estimate by 270% in its last August report. You’d think that would mean good things for a Zacks Rank # 1 (Strong Buy), but it actually slipped almost 25% from this version. And it’s now down 35% from its all-time highs. This means that he is a good candidate for this portfolio. Jeremy believes ROKU will likely bounce back to its 200 days to around $ 360- $ 370, which would mean a 15-20% gain. The publisher added the action on Friday with a small position of 4%, but plans to handle this trade and possibly add more if it is long-term support of around $ 250. “Don’t be surprised if this goes against us, the key will be to run this trade,” Jeremy said. Read the full article to learn more about this movement.
Value investor: The portfolio moved back to oil on Friday adding Pioneer National Resources (PXD), as Tracey still believes we are entering a multi-year energy bull market. PXD is an industry leader in E&P and should be less volatile than the little names. In addition, the company has one of the best track records in the industry. In fact, PXD’s free cash flow is so “huge” that it pays a variable dividend in addition to its regular dividend. And, of course, it has all the great value for money features. Meanwhile, Tracey has been patient with Fiserv (FISV), but she finally ditched it today for a slight loss after being pretty much in place since it was added in February. Read the full article to learn more about these moves.
Healthcare innovators: The top players scoreboard was dominated by this portfolio on Friday with the top four names. These winners were Twist Bioscience (TWST, + 6.9%), Pacific Biosciences of California (PACB, + 6.7%), Invitae (NVTA, + 6.05%) and CRISPR Therapeutics (CRSP, + 5.9% ).
Main trader: “I suspect the Fed will wait for its announcement to cut its monthly asset purchases by $ 120 billion until there are clear signs that the impacts of the Delta-dent are behind us.
“This declining lag should catalyze another wave of venture capital in public stocks, especially if averages continue to slide in the meeting.
“Either way, I expect to see the market move next Wednesday afternoon (FOMC statement at 2:00 p.m. EST and Jerome Powell post-meeting press conference at 2:30 p.m.).” – Dan Laboé
Have a good week-end!
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.