After two months of solid gains, the market has a lot to live up to as we begin June. However, stocks did rise to kick things off on Monday amid an economic re-opening and violent protests in several U.S. cities.
The NASDAQ was up 0.66% (or about 62 points) to 9552.05 and is now within 2% of a record close, while the S&P (NYSE:SPY) rose 0.38% to 3055.73.
The Dow recovered from a more than 160-point loss in the morning to advance 0.36% (or around 91 points) to 25,475.02.
Stocks are coming off a solid May performance that saw the NASDAQ jump nearly 7% while the other two advanced over 4% each. And that came after double-digit gains for all in April.
The indices are also up over the past two weeks.
The big news over the weekend, of course, was the oftentimes violent protests over police brutality in several of our biggest cities. However, the market seemed to focus more on the re-opening economy, which may have slipped from the headlines but is still gaining steam as we enter June.
The market got a lift from the ISM manufacturing index, which was 43.1% for May. The reading is still well below 50 (signifying contraction) and fell short of expectations. But it was a nice improvement from the previous month’s 41.5%.
Investors are hoping that this signifies we have seen the worst of this coronavirus pullback and that activity will continue to pickup as more and more of the country opens its doors for business.
It’s the first week of the month, so we’ll be getting a lot of data in the coming days to give us an idea of how close (or far) the economy is to getting back on its feet. The big report will be the employment situation on Friday, which showed that the unemployment rate soared to 14.7% last month.
It will undoubtedly go up again, but perhaps it will show some improvement. The weekly jobless claims have mellowed a bit in recent releases and the market has shown an ability to look past the jobs numbers of late.
So its going to be another crucial week in our fight against the coronavirus, in addition to the increasing problems with China and now civil unrest.
Today's Portfolio Highlights:
Options Trader: The portfolio is kicking off the month of June with a couple of moves. Kevin added a pair of bull call spreads in Electronic Arts (NASDAQ:EA), the popular video game software and content company. If the stock can gain about 9% to $135 by the mid-September expiration, then this position will return 143%. The editor also added two bull call spreads in Intercontinental Exchange (NYSE:ICE), the global operator of regulated exchanges, clearing houses and listings venues. The company has double-digit projected sales and earnings growth. If it can climb 12.6% to $110 by the mid-September expiration, it would bring in a 212% return. Both stocks are Zacks Rank #2s (Buys). Read the complete commentary for a lot more on these moves, including the specific options being employed.
Surprise Trader: People are shopping online for as much as they can during this pandemic… and that includes supplies for their cats and dogs. Chewy (NYSE:CHWY) has them covered. This Zacks Rank #2 (Buy) online pet retailer was a major beneficiary of the ‘stay home’ economy and enjoyed a “huge influx of business during the quarantine”. Now the company is preparing for its first report since the lockdown on Tuesday, June 9 after the bell. It currently has a positive Earnings ESP of 100%! It beat by more than 76% last time. Dave added CHWY on Monday with a 12.5% allocation. The editor also sold Viasat (VSAT) and Autohome (ATHM). Read the full write-up for more. One more thing, this portfolio had one of the best performers of the day among all ZU services as CURO Group Holdings (CURO) jumped 10.6%.
Black Box (NYSE:BOX) Trader: Half of the portfolio was replaced in this week's adjustment, and ALL five sells brought positive returns. The stocks that left today were:
• Hain Celestial (NASDAQ:HAIN, +23.2%)
• Virtu Financial (NASDAQ:VIRT, +7.8%)
• Dollar General (NYSE:DG, +5.7%)
• Flowers Foods (NYSE:FLO, +2.8%)
• Wayfair (NYSE:W, +2.6%)
The new buys that replaced these names are:
• Big Lots (NYSE:BIG)
• Camping World (CWH)
• Graphic Packaging (GPK)
• Teekay Tankers (NYSE:TNK)
• Vector Group (NYSE:VGR)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Healthcare Innovators: The best performing stock of the day among all ZU portfolios came from this service, as Intellia Therapeutics (NASDAQ:NTLA) soared 19.5%. The genome editing company expanding its collaboration with Regeneron (NASDAQ:REGN) to provide the latter company with rights to develop products for additional in vivo CRISPR/Cas9-based therapeutic targets. The companies will jointly develop potential products for the treatment of hemophilia A and B. NTLA is currently the portfolio’s second-best performer with a gain of more than 55% since its addition last November.
Until Tomorrow,
Jim Giaquinto
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