Stocks and Securities

Wednesday was another record-setting day on Wall Street with the S&P 500 (+0.6%), the Nasdaq Composite (+1.0%), and the small-cap Russell 2000 (+0.4%) closing at all-time highs for the fourth day in a row. The Dow Jones Industrial Average (+0.2%) finished at a seven-month high, coming within 2.0% of its record.

Dow Industrial AverageS&P 500Nasdaq 100Russell 2000

 

 

 

 

 

 

 

 

 

 

 

The gains were spurred by Economic growth numbers for the second quarter that were even better than we thought. Real US gross domestic product grew at an annualized rate of 4.2% last quarter, the Bureau of Economic Analysis reported Wednesday. That’s up from 4.1 percent in its initial estimate. The new number is based on more complete data, which for the second quarter included higher business investment and lower imports.

Notable earnings for this week:

  • Thursday (Aug 30)
    • Morning: ANF BURL CIEN CPB DG DLTR GMS KIRK MEI MIK PDCO SIG TD TECD TITN
    • Afternoon: AMBA AOBC COO LULU NTNX PAGS ULTA YEXT ZUO
  • Friday (Aug 31)
    • Morning: BIG

Equity gains were broad-based on Wednesday, with eight of eleven sectors finishing in the green. The consumer discretionary and information technology sectors were the top-performing groups, benefiting from a rise in most FAANG names, including Amazon (AMZN 1998.10, +65.28, +3.4%) and Apple (AAPL 222.98, +3.28, +1.5%), both of which finished at new all-time highs.

Amazon shares nearly broke the $2000 mark after Morgan Stanley raised its target price for the internet retail giant to $2500 — a new Street high. Reports circulated that Amazon is planning to launch an ad-supported free video app, a direct challenge to a similar service offered by Roku (ROKU). Built by the company’s IMDB subsidiary, the new offering will be for the estimated 48 million people who use the company’s Fire TV streaming devices.  Like the Roku Channel, Amazon’s version will license older TV shows which have already aired. The Roku Channel was a major driver of the company’s platform business, which includes ad sales, licensing and revenue sharing.

Meanwhile, the energy sector (+0.6%) also had a positive session, helped by a rise in crude prices. West Texas Intermediate crude futures finished higher by 1.4% at $69.50/bbl, extending gains after the Department of Energy’s weekly inventory report showed that U.S. crude stockpiles decreased by 2.6 million barrels last week.

Crude oil WTI - Oil markets and oil pricesCrude oil Brent - oil markets and oil prices

 

 

 

 

 

 

The trade-sensitive industrial sector (+0.1%) struggled to stay afloat despite both President Trump and Canadian Prime Minister Justin Trudeau expressing optimism over U.S.-Canada trade talks, which they are looking to wrap up by Friday. In turn, the heavily-weighted financial sector (-0.02%) underperformed, as did the telecom services (-0.8%) and real estate (-0.1%) sectors.

Looking at other markets, U.S. Treasuries finished Wednesday roughly flat, with the yield on the benchmark 10-yr Treasury note closing unchanged at 2.88%. Meanwhile, the U.S. Dollar Index slid for a fourth straight session, dropping 0.2% to 94.47, and the CBOE Volatility Index declined 3.2% to 12.1.

 

What are the best stocks to buy in this market?

 

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Stocks on the Radar

Regarding potential ETF plays from our ETF ALPHA segment, last week we had the notables UWT (+13%), SOXL (+11%), LABU (+8%), YINN (+6%), and ERX (+5.5%). Look at this weeks take on the ETFs we follow.

Furthermore, we encourage our readers to look at our most recent article titled “New Frontiers in Genomic Medicine” as we highlighted Bluebird BioInc. (BLUE) as our next long-term investment opportunity.