Stocks Go Nowhere After Two Days of Big Moves

After two days of sharp swings in both directions, the major indices didn’t move much at all on a very busy Wednesday session that saw a Fed statement, a trade deal signed, earnings reports from tech giants and ongoing concerns of the coronavirus.

For example, the NASDAQ dropped 1.9% on Monday, recovered 1.4% on Tuesday and ended today higher by only 0.06% (or a little over 5 points) to 9275.16.

The other indices went on the same trip over the past three days. The Dow finished higher on Wednesday by 0.04% (or more than 11 points) to 28,734.45. However, the S&P slipped 0.09% to 3273.40.

Stocks were doing much better in the middle of the day as the Fed kept interest rates unchanged (as was widely expected) and gave a rather positive outlook for the economy. But the upward momentum was lost with stocks dipping into the close.  

Shares of Apple took off by more than 2% after reporting a solid quarter last night that included better-than-expected earnings and revenue. iPhone revenue climbed 8%.

But that was only the tip of the iceberg in a week that sees three of the FAANGs reporting.

After the bell today, Microsoft and Facebook each beat on both the top and bottom lines. However, shares went their separate ways afterward.

As of this writing, MSFT is up more than 3% afterhours, as revenue of its Azure cloud business soared. However, shares of FB are down approximately 7% on concerns over rising expenses.

By the way, Tesla is up approximately 10% as this is being written after reporting better-than-expected results.

Of course, there were dozens of companies going to the plate today as earnings season has really kicked into gear. So far, the results have been mostly positive.

As if the Fed and earnings season wasn’t enough, USMCA was signed today by President Trump. Remember when it seemed like every business headline was about trade?

For the past few days though, a lot of the headlines have been about the coronavirus. It’s still spreading and the market remains concerned, but it hasn’t been as big of a factor the past two days as it was on Monday. But that could always change, especially if WHO decides to declare it a public health emergency when they meet on Thursday.

Today’s Portfolio Highlights:

Surprise Trader: The Financial – Investment Management space is in the top 5% of the Zacks Industry Rank, which was one of the big reasons why Dave added Artisan Partners (APAM) on Wednesday. This Zacks Rank #1 (Strong Buy) is an independent investment management firm that provides a broad range of U.S., non-U.S. and global equity investment strategies. The company reports after the bell on Tuesday February 4. Analysts are expecting 73 cents on $209.15 million, which would mark year-over-year growth of nearly 20% and more than 9%, respectively. The editor added APAM today with a 12.5% allocation. He also sold the underperforming Northwest Bancshares (NWBI). Read the full write-up for more on these moves.

Technology Innovators: Shares of Macom Technology (MTSI) soared nearly 17% on Wednesday, a day after this provider of power analog semiconductor solutions announced better-than-expected fiscal first quarter results. The company earned 7 cents per share, which topped the Zacks Consensus Estimate by over 133%. Revenue of $119.1 million also beat our expectation. MTSI was easily the best performing stock of the day among all ZU portfolios. It has now gained nearly 24% since being added a little less than 2 months ago.

Until Tomorrow,
Jim Giaquinto

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