Bull Roll

Quick Take: Buy Bias. Growth Stocks continue to breakout and survive.

The Bull keeps rolling as the indexes flirt with new highs. A flood of money and a rebounding economy fuel the charge. 

For The Week:

INDEXCLOSE% CHANGEYTD %
DJIA27433.483.8-3.9
Nasdaq11010.982.522.7
S&P 5003351.282.53.7
Russell 20001569.186.0-5.9

The economy likely bottomed out in April, according to many economists. While these “experts” don’t always get it right, there’s no denying improving data. 

Workers are coming back in action. Nonfarm payrolls added 1.763 million for July. The belief is people returned to old jobs rather than new ones being created.

The unemployment rate has improved to just over 10%, this is an improvement from just over 11% in June. Bu it could take years to get the rate back below the pre-pandemic rate of 4%.

Further positive data came from the ISM report that showed manufacturing activity and non-manufacturing activity continued to expand in July.

Optimism over a vaccine was perpetuated with Novavax (NVAX, +19%) reporting positive results in its trials. The stock was highlighted multiple times here as a growth stock since April.

President Trump called for a shutdown of the China-based TikTok (ByteDance) and WeChat (Tencent Holdings, TCEHY, -1.85%) phone apps in the U.S. unless they found a domestic buyer within 45 days. 

Trump may be angling for China to open its market to fair play for American companies. The possibility also lingers that the apps will be bought by Microsoft, as talk of a deal between the companies continues. 

Look for more efforts to bring production back to the U.S., specifically pharmaceuticals, medical equipment and protective gear. 

America depends on China for about half of its medical supplies. China is the U.S.’s second-largest source of car parts. China is also believed to provide about 60% of all imported electronics, including cell phones. On the other side of the balance China was the fastest-growing market for U.S. exports for fifteen years. 

TECHNICALLY SPEAKING

  • Buy-volume prevails as the NYSE and Nasdaq posted buy/sell ratios of 1.6 and 1.7 respectively. 
  • Total Volume on the NYSE and Nasdaq exchanges matched last week’s.
  • Advances/Declines favored bulls with 3.0 and 2.8 ratios. 
  • New highs were up 12% for the week on the NYSE as it posted 289. The Nasdaq was up 50% at 477. 

LEADERSHIP

Top tech stocks hold their high ground with uptrends above 50-day moving averages. 

Facebook (FB, +5.82%), Apple (AAPL, +4.76%) Amazon (AMZN, +.09%), Netflix (NFLX, +1.20%) Google (GOOG, +0.78%) Microsoft (MSFT, +3.64%) 

Walt Disney (DIS) rocketed 11% after reporting a second quarter profit and strong subscriber numbers for its streaming platform. 

SECTOR ACTION

 SYMBOLNAME% CHG
XLIIndustrial Sector Fund4.74
XLFFinancial Sector Fund3.37
XLEEnergy Sector Fund3.19
XLCCommunication Services Sector Fund3.1
XLKTechnology Sector Fund3
XLYConsumer Discretionary Sector Fund2.47
XLBMaterials Sector Fund2.24
XLPConsumer Staples Sector Fund1.29
XLUUtilities Sector Fund1.08
XLVHealth Care Sector Fund0.83
XLREReal Estate Sector Fund0.66

THE GROWTH STOCK REPORT

Lots of names in Biotech and Medical Devices setting up. 

Click Here For Full Report

Stay safe,

Dan