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Chopping Through the Amazon Report

All in all, the market held up well to Amazon’s disappointing report from yesterday afternoon. The major indices started the session deeply in the red, but spent the rest of the day slowly but surely trekking higher. The Dow managed to finish on the positive side, and the losses for its counterparts felt muted against the surprising softness of Amazon’s numbers. A largely in-line Q2 GDP result also helped to keep the major indices around all-time highs. 

The Dow isn’t just “around” all-time highs…it’s still there! The index finished the week with a third straight record, as it recovered from the morning weakness to gain 0.15% to 21,830.3. It was also the only one of the Big 3 to finish the week in the green with an advance of 1.2%. 

The S&P couldn’t reach 2500 this week, but it’s still just a stone’s throw away. It lost 0.13% on Friday to finish at 2472.1. The NASDAQ was most susceptible to the Amazon news, especially after hitting a brick wall yesterday. The index fought hard from the morning and lost only 0.12% to 6374.7. For the week, the S&P slipped less than 0.1% and the NASDAQ was down 0.2%. 

In addition to more earnings results next week, it’s also time for the turn-of-the-month economic data. With earnings season being solid, strong reports for ISM Manufacturing (Tuesday), ISM Services (Thursday) and the Government Employment Situation (Friday) would be a great one-two punch for this market. But before you start the weekend, take a look at all the moves in the portfolios below, including more double-digit winners and a few buys. 

Today's Portfolio Highlights: 

Healthcare Innovators: The most promising treatment for cystic fibrosis comes from Vertex Pharmaceuticals (VRTX), which recently enjoyed some great news when three of their 4 next-generation treatments received positive Phase 1 and Phase 2 data. If/when these therapies are approved, VRTX will be in line for increased sales and earnings growth over the next 5 years and make a big difference for people suffering from CF. This is just what Kevin looks for in the portfolio, so he picked up a position in VRTX on Friday. Read the complete commentary for more. In other news, HI’s position in Align Technology (ALGN) was one of the top movers among all the portfolios today with a gain of slightly more than 10%. 

Momentum Trader: An energy infrastructure company may be a bit risky right now, but Dave really likes what he sees with Par Pacific Holdings (PARR). This Zacks Rank #2 (Buy) has been rallying since the beginning of the year, and the editor thinks it’s time to get involved given the steady accumulation. He added PARR today with a 12.5% allocation. The full write-up has more on this new pick, including a breakdown of its chart. 

Reitmeister Trading Alert: Steve has been calling for the S&P to reach 2500 for a while now, but the index continues to loiter just below the mark. While he’s waiting, the editor decided to pick up a 10% allocation in S&P 500 Bull 3X ETF (SPXL), which “will partner with TNA to mop up extra profits on the likely rise to 2500 in the not too distant future”. Read more in the complete commentary. Meanwhile, RTA had the top performer of all the Zacks portfolios on Friday as Aaron’s (AAN) jumped more than 17%. 

Income Investor: Computer – storage devices used to be one of the super hot industries...but not anymore. It is currently in the bottom 14% of the Zacks Industry Rank, so Neena decided this was a great time to take her profit in Western Digital (WDC). The company recently beat on both the top and bottom lines. However, its ongoing legal battle with Toshiba provides unwanted uncertainty, prompting the editor to cut ties and sell WDC for a 27.1% profit. 

Stocks Under $10: The portfolio shed four names on Friday, and the biggest winner was Hudson Technologies (HDSN). This commercial air conditioning company has been weakening of late, so Brian Bolan sold it to secure an approximately 12% return. Constellium (CSTM) was also a winner despite missing earnings in its recent report. The editor wants to get out of this Netherlands-based aluminum products company before its Zacks Rank slips. Therefore, it was sold today for a more than 8% profit. The portfolio is now off its ideal complement of 20 names, so be prepared for at least two more buys next week. 

Zacks Counterstrike: "Bears tried to bring markets lower overnight, but there was no follow through into yesterday’s selloff reversal. The bulls are still believers in this market and that was shown in the slow and steady grind higher throughout the day. Even another North Korea missile launch couldn’t scare indices into dropping. At the close, the S&P and the Nasdaq finished only slightly in the red. The Dow was actually green for the day.  

"While the lack of follow though lower is the norm, I was actually a bit surprised that there wasn’t more pressure. With Amazon lower overnight, I thought the bears had enough to get stocks selling again. However, a summer Friday isn’t the best time to expect big market moves, especially with the end of the month on Monday. If next week’s direction is lower, we could see the start a short-term trend to the downside. However, all signs still point to the low volume chop we have been seeing. 

"The big news was the advanced GDP reading that came in as expected at 2.6%. This keeps the “Goldilocks” scenario going for the Fed. For that reason the number was a non-event and didn’t move markets." -- Jeremy Mullin 

Have a Great Weekend,
Jim Giaquinto 

One More Thing... 

Take some time this weekend to get caught up with our ZU Special Reports, especially the most recent 7 Stocks for the Next 30 Days. Other recent reports that you get free of charge as a ZU subscriber include: 

• Ultimate Four July ‘17
• Conducting the Future of Technology, and
• 5 Stocks to Double

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