The market finally saw a respectable rally in September on Wednesday, and now the major indices are on positive ground for the week as we move past the halfway point. Along the way, the NASDAQ snapped its five-day losing streak.
The S&P rose 0.85% today to 4480.70, while the Dow advanced 0.68% (or nearly 237 points) to 34,814.39. These results mark only the second positive close for the indices in the last eight sessions. Meanwhile, the NASDAQ ended a five-day drought by rising 0.82% (or about 123 points) to 15,161.53.
Perhaps there’s some delayed reaction to yesterday’s CPI report, which failed to provide any upward momentum despite being slightly cooler than expected. Consumer prices rose 5.3% year over year and 0.3% month on month, which improved upon the previous print’s gains of 5.4% and 0.5%, respectively.
But Wednesday had a couple positive points as well. The Empire State Manufacturing Index was sharply better than expected by jumping to 34.3 from last month’s 18.3, while also easily beating expectations of 18.6. In addition, a surge in oil prices also helped break the market out of its rut.
“WTI crude futures broke out today as the production-halting impact of hurricane Ida and the swift global rejuvenation from the recent COVID-variant are throwing off the balance of supply and demand in this market,” explained Dan Laboe in today’s Headline Trader.
Or maybe it was just time for some relief from all the negative momentum since that disappointing jobs report a couple weeks ago. Will we be able to build on these gains this time? There’s some important economic data scheduled for Thursday that could make a difference.
First of all, jobless claims will be released tomorrow. Last week, the print came to only 310K, which was better than expectations at 335K and the previous week’s 340K. It also marked another pandemic-era low. A break below 300K would definitely be fun.
Retail sales are also scheduled for Thursday. Last month’s decline of 1.1% fell well short of expectations for a loss of only 0.3%. It also unnerved investors who were worried about global growth amid the delta variant. They’re still worried about that a month later, so this report will be of interest.
We’re now more than halfway through September… and the month is living up to its reputation as the worst time of the year for stocks. Let’s see if things change in the back half…
Today's Portfolio Highlights:
Options Trader: The Banks – West space is currently in the top 24% of the Zacks Industry Rank. One of the companies from this area is Western Alliance Bancorp (NYSE:WAL), which provides a broad array of banking, leasing, trust, investment and mortgage services in NV, AZ and CA. While Kevin likes the banks in general right now, he’s especially interested in the potential head and shoulders pattern that’s forming with WAL at the moment. In fact, the editor bought to open a March 105.00 Call in WAL on Wednesday, since he expects the uptrend to continue and eventually breakout through $102.97. Make sure to read the complete commentary for all the specifics on this move and learn why Kevin considers it to be a higher risk than normal.
Healthcare Innovators: Shares of Dynavax (NASDAQ:DVAX) plunged double digits earlier this week on news that one of its customers, French vaccine maker Valneva, received a termination notice from the UK in regards to its vaccine candidate. Well, that’s a pretty good reason to get out of DVAX and collect a nice 51% return. Kevin added this provider of vaccine adjuvants (molecular aids for immunogenicity) back in early February. Read the complete commentary for a lot more on DVAX and the editor’s decision to take it off the table. By the way, this service enjoyed a top performer today as Exact Sciences Corp. (NASDAQ:EXAS) rose 7.8%.
All the Best,
Jim Giaquinto
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