NASDAQ Pulls Back from Record to Join S&P, Dow in the Red

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▪ Kevin Cook and John Agree to Disagree on where the S&P 500 will end in 2021
▪ Kevin Matras answers questions covering Breakaway, Runaway and Exhaustion gaps in Zacks Mailbag  
▪ Sheraz and Daniel choose one portfolio to give feedback for improvement
▪ And much more
Simply log on to Zacks.com and view the September episode here. And please let us know what you think of this format. Email all feedback to [email protected]
This short week is turning into a dud as the S&P and Dow each declined for a second straight session (and third consecutive stretching back to last week). Now even the resourceful NASDAQ joined the malaise.
The indices are still very close to their all-time highs (one of which was just set on Tuesday), so this isn’t the correction that many are waiting for in the intimidating month of September. However, this slight pullback is quite boring with volume remaining low and investors still shaking their heads over the disappointing jobs report.  
The NASDAQ managed tiny gains in the previous two days and even set a record close yesterday. But it was the biggest decliner on Wednesday by slipping 0.57% (or about 87 points) to 15,286.64.   
Meanwhile, the Dow declined 0.20% (or more than 68 points) to 35,031.07, while the S&P slipped 0.13% to 4514.07. That makes three consecutive sessions of losses for these indices, which began after the soft jobs report on Friday that missed expectations by almost 500K.
You may be tired of hearing about employment data, but we will be getting more tomorrow with jobless claims. Last week, this report provided a bright spot by setting a new pandemic-era low at 340,000 that also bettered expectations.  
“The market will try and find its footing. The rally over the previous couple of weeks has been pretty fast paced. So it’s not surprising to see the market catch its breath,” said Kevin Matras in Options Trader.
Today’s Portfolio Highlights:
Home Run Investor: The market may have been weak today, but Brian noticed a nice rebound in a medical device name that will bring some diversity to the portfolio. Organogenesis Holdings (ORGO) is a leading regenerative medicine company focused on solutions for the Advanced Wound Care and Surgical & Sports Medicine markets. The company has beaten the Zacks Consensus Estimate in each of the last four quarters with an average surprise of nearly 200%. Furthermore, rising earnings estimates have made ORGO a Zacks Rank #2 (Buy). The valuation is a bit “stiff” but the editor really appreciates its rising margins, which should drive earnings moving forward. Read a lot more about the new addition of ORGO in the complete commentary.
Commodity Innovators: It’s a good thing that Jeremy held onto ProShares Ultra Bloomberg Natural Gas (BOIL) despite a recent pullback, because it was the best performing investment among all ZU names on Wednesday by jumping over 15% on a down day. The editor is still waiting for natural gas to get over $5 before selling this short-term play, which he thinks is “right around the corner”. For now though, BOIL, which moves 2X the daily move of natural gas, is the best performer in the service by soaring more than 45% in just two weeks.  
Surprise Trader: “If yesterday was a slow start then today was an ugly finish. The morning was full of selling, with the small caps leading the broad market off the cliff. The same old story again and again here with negative COVID headlines dominating the news and more jobs than folks willing to fill them. It certainly is a transitory period for this economy and with that level of uncertainty you inevitably have markets like this.
“The bulls came in to pick up the pieces, buying the dip into the afternoon but it still was not enough to break the downside momentum.
“Not a great week so far. I am encouraged by the dip buying that stepped in this morning. There were several industries that stubbornly remained green today. A broad market selloff was not the case here. A bit of rotation which is creating opportunities.”
— Dave Bartosiak
Have a Great Evening,
Jim Giaquinto

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