SPECIAL ALERT: We have just published the Special report of the four ultimates, which includes four stocks that our team believes have the greatest upside potential in the next quarter. This latest report features the favorite stocks of Jeremy Mullin, Daniel Laboe, Neena Mishra, CFA, FRM and Brian Bolan. Log in to Zacks.com to see these stocks today.
Rising Treasury yields finally took a significant market share on Tuesday, sending two of the major indices plunging more than 2% and ending the Dow Jones’ four-day winning streak.
Now, we could feel it coming. Tech stocks were under pressure yesterday for the same reason, but the 1.5% 10-year pass opened the floodgates today. As expected, the NASDAQ had the worst and fell 2.83% (or about 423 points) to 14,546.68. This is one of the worst slides of 2021.
FAANGs were crushed with Facebook (FB) and Alphabet (GOOG) each down more than 3%, while Apple (AAPL) and Amazon (AMZN) fell more than 2%. Microsoft (MSFT) was also battered at 3.6%.
Meanwhile, the S&P, which has significant exposure to full-fledged technology, was down 2.04% to 4,352.63. The Dow Jones was not spared from Tuesday’s drop as it plunged 1.63% (or nearly 570 points) to 34,299.99, ending its four-day winning streak that began last Wednesday with the Fed’s statement.
By the way, that Fed statement last week came when rates started to rise, as President Jerome Powell signaled that the reduction in asset purchases may begin soon. Maybe before the end of the year. Investors took it in stride until that 10-year period started to skyrocket.
And there wasn’t much else to distract the market from the rate hike. Instead, we got a disappointing Consumer Confidence report for September, as the impression at 109.3 was below the previous month and expectations were around 115. This was a third monthly decline. consecutive.
Plus, it looks like Washington can go all the way to fund the government… if they really do. A bill that would have made it possible to move things forward until early December and also raise the debt ceiling was blocked last night. Congress has until the end of the month, i.e. Thursday, to fund the government and avoid an October shutdown.
Highlights of today’s portfolio:
Actions under $ 10: The portfolio is now fully invested following the addition today of health and organic food company SunOpta (STKL), which easily exceeded Zacks’ consensus estimate in three of the past four quarters. Rising profit estimates made this company a Zacks Rank # 2 (Buy). Brian believes a rebound is near for STKL after the stock fell below $ 9 from $ 13 in June. Once the market returns to the recovery, STKL is expected to do so as well. The publisher wants to be on board for this rebound. Read the full article to learn more about this new addition.
ETF Investor: Rates have been rising since the Fed’s statement last week, leaving regional banks in an excellent position to capitalize. Space derives most of its income from the interest rate differential. Therefore, Neena on Tuesday added the SPDR S&P Regional Banking ETF (KRE), which is the largest product in a space with more than $ 4.9 billion in assets. It also has an expense ratio of 35 basis points. The publisher will wait for a better day on the market to sell any of the service’s assets. Read the full article to find out more.
Income investor: It’s always exciting to mix things up in your wallet, but it’s all the more satisfying when you can also cash in multiple double-digit winners along the way. This was the case on Tuesday when Maddy sold Broadcom (AVGO) for 55.8%, SPDR S&P Dividend ETF (SDY) for 24.6% and PepsiCo (PEP) for 13%.
The publisher filled the void with a few Zacks Rank # 1 (Strong Buys) from disparate spaces. HP Inc. (HPQ) sells printers, laptops, and desktop computers. The recent third quarter report was nothing out of the ordinary, but Maddy really likes the rising earnings estimates and its “eye-catching” valuation. And don’t forget that HPQ is one of the most trusted names in PC business in an era of booming mobile workplaces. Meanwhile, Hanesbrands (HBI) is also a trusted name… but in the clothing industry. The company’s full potential plan is finally bearing fruit with solid results in the second quarter which also included strong prospects for the future. The publisher is very impressed with HBI’s market share gains, the success of its Champion brand, its 3.2% dividend yield and the valuation below 11x forward earnings. Read the full article to learn more about all of these moves.
Zacks Short Selling List: The portfolio cashed in a double-digit winner as part of this week’s adjustment. The three stocks that were short hedged on Tuesday included:
• Las Vegas Sands (LVS, + 28.2%)
• JD.com (JD, + 4.4%)
• Huazhu Group (HTHT, + 0.7%)
The new purchases that filled these places were:
• JOYY Inc. (AA)
• Overstock.com (OSTK)
• WillScot Mobile Mini Holdings (WSC)
Learn more about this emotionless portfolio that benefits from falling and volatile markets by reading the Short Selling List Trader’s Guide. By the way, this service recorded some very good results on Tuesday as shorts from Certara (CERT) and AppLovin (APP) rose 7.3% and 5.2% respectively.
Have a good evening,
Click here to “test” Zacks Ultimate FOR FREE >>
Zacks investment research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.