Stocks for the week after climbing more than 2% in 2 days

Not only did yesterday’s post-Fed rally continue on Thursday, but it also gathered pace and gave the major indices a chance to achieve their first positive weekly performance since early September.

The Dow Jones jumped 1.48% (or about 506 points) to 34,764.82, while the S&P jumped 1.21% to 4,448.98. The NASDAQ improved 1.04% (or about 155 points) to 15,052.24. All of these indices are now up more than 2% in the last 2 days.

We are taking advantage of the first real stock market rally in this difficult September. In fact, this is the first time that the major indices have all risen by more than 1% since July 20. And now, stocks are a striking distance from a two-week drop with a strong performance on Friday. (The Dow Jones has actually been in the red for three straight weeks.)

Big moves after a Fed statement are normal… and sometimes this action goes in the opposite direction like the day before. However, investors clearly still feel quite satisfied with what they heard yesterday.

Basically, the stimulus policies that helped us survive the pandemic will remain in place for now. However, we are getting closer to reducing the asset purchase program now that the Fed’s inflation and jobs mandates are almost met. We will most likely have an announcement at the next Fed meeting before the end of the year.

“Despite the more hawkish tone from Fed Chairman Powell yesterday afternoon, this seemed like what the markets wanted to hear,” Dan Laboe told Headline Trader. “As I said in previous comments, a declining Fed schedule is now a relief because of its implications for our economic health.”

In a nutshell, the economic recovery continues despite the delta variant, and the progress is so great that it’s time to start thinking about throwing in the crutches.

Evergrande’s situation continues to be a potential problem, as China’s largest real estate developer remains precariously close to default after taking on roughly $ 300 billion in debt. The company settled an interest payment of $ 36 million yesterday, which allowed some breathing room on Thursday.

But Evergrande is still in trouble as investors question whether the Chinese government will let it fail or not. We will be following this story with great interest in the days to come. We’ll also be keeping a close eye on Washington here at home as it attempts to stop a government shutdown by raising the debt ceiling.

Thursday’s jobless claims report was a little disappointing, but luckily it didn’t get much attention given all the other news. The print amounted to 351,000 claims last week, which was more than expectations of 320,000 and 335,000 from the previous week.

It would be quite an achievement for stocks to end this week in the green after such a tough start on Monday. Let’s see what will happen tomorrow …

Highlights of today’s portfolio:

Technological innovators: The market is heating up after a cold start to September, which is why Brian has decided to raise the temperature in this portfolio by adding Thermon Group Holding (THR). This Zacks Rank # 2 (Buy) is engaged in thermal solutions, known as heat tracing, for process industries such as energy, chemical processing and power generation. The publisher believes the company, which has maintained profitability throughout the past year, is about to turn around and return to recent highs. THR saw 25% revenue growth in the last quarter, while margins increased to 5.9% from 3.7%, which could potentially increase EPS going forward. Read the full article to learn more about this new purchase and get ready for two additions next week as Brian strives to fully invest the portfolio with 15 names.

Home investor: If you want to get more aggressive in your wallet (like Brian wants to do with the market on the rise) then the token space is a good place to do it. The publisher bought out Thursday by taking over Camtek (CAMT), which manufactures automatic optical inspection systems for several industries, including semiconductor manufacturing and packaging. The company has beaten Zacks’ consensus estimate three times and tied once in the past four quarters, while rising earnings estimates have given CAMT Zacks Rank # 2 (Buy) status. Meanwhile, Brian also sold defensive pick BellRing Brands (BRBR) for a slight loss. See the full commentary for more on all of today’s actions.

Actions under $ 10: The staffing industry is booming right now, which is why Brian added RCM Technologies (RCMT) over a week ago. The title is still in the red since its resumption on September 14, but things may be about to change. The stock was the best performing of any ZU name on Thursday, rising nearly 14%. Remember, the biggest winner of the service is recruiting company Cross Country Health (CCRN), which has climbed 157% in ten months.

See you Friday,
Jim giaquinto

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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.

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