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For the second Monday in a row, the market was greeted with some very encouraging vaccine data that suggests this pandemic’s days are numbered.
This week it was Moderna (MRNA, +9.6%), which stated that its vaccine candidate was more than 94% effective in preventing the coronavirus.
That’s even better than the 90% effectiveness for the Pfizer (PFE)/BioNTech treatment announced exactly one week ago. Plus, the MRNA vaccine doesn’t need to be stored in such cold temperatures.
For investors though, it’s not a competition. Let’s just get the stupid virus under control so the economy can get back on its feet and allow the market to do what it does best. And two effective vaccines are better than one at reaching those goals.
Actually, the market isn’t waiting around. Today’s news sent another major index to all-time highs.
The Dow jumped 1.6% (or about 470 points) to a record 29,950.44. Meanwhile, the S&P made history on Friday, and continued trailblazing on Monday by adding another 1.16% to reach an all-time closing high of 3626.91.
We saw the same kind of rotation into recovery names (e.g. airlines, cruise companies, leisure, etc.) as last Monday, but without as much fervor.
For example, the NASDAQ did underperform its counterparts as you might expect with money flowing out of the “stay home” names. However, the index still advanced 0.80% (or nearly 95 points) to 11,924.13.
Last Monday, the index plunged 1.5%.
The market is having a great November so far. Heading into today’s action, the Dow and S&P were both up approximately 10% in the month, while the NASDAQ had advanced over 8% despite slipping 0.6% last week.
Now those numbers are even better as investors are feeling pretty good that we’re getting close to the finish line. In the meantime though, we still have to play defense since the virus isn’t gone yet…
Today's Portfolio Highlights:
Options Trader: The portfolio added three names on Monday that are trading around bullish symmetrical triangle patterns and seem set to move higher from here. Kevin added two bull call spreads in Workday (WDAY), a provider of enterprise cloud applications with projected sales growth of 17.65%. He also added a call each in Old Dominion Freight Line (ODFL) and Intuit (INTU). ODFL is a less-than-truckload company from a hot industry (top 9%) with 12-month projected earnings growth of 25.50%, while INTU handles Quickbooks and TurboTax with 12-month earnings growth of 11.5% and a nice valuation. WDAY looks poised to break out of the pattern, while ODFL broke out today and INTU already broke through. Earnings estimates are moving higher for these names, yet they’re still Zacks Rank #3s (Holds) for now. Read the complete commentary for more on these moves, including the specific options that the editor bought.
Technology Innovators: This strong market is giving Brian a chance to increase exposure across all his portfolios. On Monday, he picked up Criteo (CRTO), a foreign digital advertising name that has beaten the Zacks Consensus Estimate in each of the last four quarters. However, it was the 81% beat in the most recent report that impressed the editor AND analysts. Rising earnings estimates in the past 30 days have made CRTO a Zacks Rank #1 (Strong Buy). The stock also has a “great” valuation. Given how strong Facebook (FB) is right now, Brian thinks that CRTO will do just fine moving forward. Read the full write-up for a lot more on today’s addition.
Commodity Innovators: With all the good vaccine news out there right now, Jeremy decided to add a few energy plays on Monday. He bought United States Gasoline ETF (UGA) on the basis that pent up demand will be a tailwind in 2021 and help gas prices get back to normal levels. Meanwhile, Energy Select Sector SPDR ETF (XLE) gives the portfolio broad exposure to the energy space with staples like Chevron (CVX), ExxonMobil (XOM) and ConocoPhillips (COP), among others. The final addition was SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which will take off on possible short squeezes in the risky E&P space. Read the full write-up for a lot more on today’s action.
Blockchain Innovators: Identity authentication services are used all over the place, including to address government and commercial fraud, age verification, secure access control and ID validation, among many others. The leader in this field is Intellicheck Mobilisa (IDN), which certainly uses blockchain technology for its services. In addition to being a Zacks Rank #2 (Buy) thanks to rising earnings estimates, the company also has strong growth numbers on the top and bottom lines. Dave added IDN on Monday. Make sure to see his complete commentary for more on today’s addition.
Black Box Trader: More than half of the portfolio was changed in this week's adjustment. The majority of stocks leaving brought profitable returns, including a couple double-digit winners. Those sells include:
• Brinker Int'l (EAT, +16.1%)
• LKQ Corp. (LKQ, +15.9%)
• Builders FirstSource (BLDR, +8.1%)
• Target (TGT, +7.1%)
• Best Buy (BBY, +2.9%)
• Realogy Holdings (RLGY)
The new buys that replaced these names are:
• AECOM (ACM)
• Amkor Technology (AMKR)
• Cardinal Health (CAH)
• General Motors (GM)
• Resideo Technologies (REZI)
• Sinclair Broadcast Group (SBGI)
This portfolio also had a top performer today as Performance Food Group (PFGC) rose 7%. Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
All the Best,
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