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You can’t keep tech down for long!
After three days of stiff declines that cut 10% out of the NASDAQ, the space finally rebounded on Wednesday and gave the market its first positive session since last Wednesday.
The index jumped 2.71% (or about 293 points) today to 11,141.56. That pales in comparison to the recent losses, but we wouldn’t want this market to heat up too quickly again after finally cooling down.
Most importantly, the advance broke one of the sharpest selloffs we’ve seen in a while.
You know who else saw a double-digit plunge in the past three days? Apple (AAPL)! But the iPhone maker also managed to snap the downward trajectory and get 4% back on Wednesday.
Amazon (AMZN, +3.77%) and Alphabet (GOOG, +1.6%) also had nice bounce-back sessions, as the FAANGs returned to the plus side… except for Netflix (NFLX, -1.35).
The S&P rose 2.01% to 3398.96, while the Dow improved 1.6% (or about 439 points) to 27,940.47. These indices shed 7.1% and 5.6%, respectively, in the pullback.
The losing streak may be over, but the volatility most likely is not. We’re still significantly higher over the past several months in an environment that remains uncertain and in the grips of a serious pandemic.
Further downside is quite possible, and may even be welcomed by investors who were finding it difficult to operate with valuations through the roof and in a market poised for a significant pullback.
Looking forward, it will be interesting to see what the jobless claims report has to say tomorrow. Last week’s number was very solid (all things considered) with claims dipping to 881K and easily beating expectations.
You may not remember the report because it got overshadowed last Thursday by the first day (and WORST day) of that three-session pullback.
If the report comes under 1 million again, it would mark the first time that happened in back-to-back weeks since the pandemic began.
Today's Portfolio Highlights:
Home Run Investor: The portfolio saw an opportunity for some much-needed diversification on Wednesday by adding Brown and Brown (BRO). This insurance brokerage has beaten earnings estimates for three straight quarters. The most recent surprise was more than 17%. Furthermore, rising earnings estimates have made the stock a Zacks Rank #2 (Buy), while increasing margins bode well for future earnings growth. Despite all this good stuff, shares of BRO sold off after the report. Brian doesn’t think it deserved such a shellacking, so he picked up the stock at a great price today. Read the full write-up for more on this new addition.
TAZR Trader: Late last month, Elastic (ESTC) reported a “beat and raise” quarter, which is rather rare at the moment. This Zacks Rank #2 (Buy) “little Google” of data search/analytics enjoyed raised price targets from several brokerages to a Street average over $125. Observing technical strength as yesterday’s low was higher than Friday’s low, Kevin figured that this was a good time to add ESTC with a 7% allocation. Read the full write-up for a lot more on those firms and their raised targets.
Blockchain Innovators: It's not unheard of for one portfolio to have three of the top five winners in one day. However, it is very rare if all three of those stocks rose by double digits! Well, that's what this service did on Wednesday with solid performances by eGain Corp. (EGAN, +18.76%), PFSweb (PFSW, +14.18%) and Exp World Holdings (EXPI, +10.55%).
Have a Good Evening,
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