This story originally appeared on Zack
Stocks lagged on Friday and finished flat for the session, but the major indices still managed to weather a steep drop on Monday and end the week with slight gains. And the market accomplished this turnaround in the second half of September, which is known as the toughest time of year for stocks.
The stock is downright lackluster today with the S&P up 0.15% to 4,455.48 and the Dow up 0.10% (or about 33 points) to 34,798, giving these indices weekly gains of 0.5% and 0.6%, respectively.
Even NASDAQ finished around the flat line (after a late-session surge) falling only 0.03% (or less than 5 points) to 15,047.70, which rose by less than four points over the five days.
However, these performances become much more impressive when you consider the start of this week, namely with a sharp drop of 1.7% or more on Monday for each of the indices. So the S&P and NASDAQ ended a two-week slippage today, while the Dow Jones is back in the green after a three-week decline.
Not a bad turn of events for September.
Clearly, the Fed played the right tone on Wednesday by keeping the stimulus in place for now, but warning that conditions are good enough to start thinking about cutting asset purchases. A lot of people think the Committee will get the ball rolling before the end of the year… and investors seem to agree.
Evergrande’s situation continues to be perilous, with China’s largest real estate developer still in danger of default without the help of that country’s government. However, the market, which fears contagion from such a major failure, calmed down after the company settled an interest payment of $ 36 million on Wednesday. Of course, this issue is still not resolved, so don’t be surprised if we hear more about it in the days to come.
Speaking of unresolved, we’re still waiting to see if the government will shut down next week. Congress must pass funding by September 30, otherwise the doors will close in October. It’s just another thing that investors will have to worry about.
The good news is that September will end next Thursday. Despite the past three days, the major indices are still down around 1.5% each so far this month. Let’s see if we can recoup some of those losses next week.
Highlights of today’s portfolio:
Counter Strike: Shares of food and drug giant Kroger (KR) have slumped 16% from recent highs due to supply chain issues. However, Jeremy agrees with analysts that this is likely a temporary problem. But the real headache with KR is that the market overlooked a strong report, which included a positive earnings surprise and even a strong outlook for fiscal 2021. The stock returned to a technical buy zone and Jeremy now sees profits in the aisles. He added KR on Friday with an allocation of 4%. The plan is to add more on any other unnecessary withdrawal, while enjoying a 2% dividend along the way. Check out the full review to learn more about this new pick.
Actions under $ 10: “This should have been the opportunity for the quick traders to take profit and the sellers should have been able to push this market down a bit more here. Instead, we see a mostly flat day and that’s at about as positive of an event as we could have.
“It makes me more and more aggressive in my position and I think we will reach new heights in early October.
“Everything I see, and I mean everything, is telling to be and stay aggressive. This week I will be fine-tuning all the portfolios and making sure we are positioned for success.” – Brian Bolan.
This portfolio also achieved the best performance of all ZU names on Friday with RCM Technologies (RCMT, + 4.8%).
Value investor: “Add to all this that there is uncertainty in Washington DC, with the federal government possibly facing a shutdown next week and the raising of the debt ceiling deadline looming in the middle. October.
“I’m not a fan of what’s going on in DC. We’ve seen this movie before, especially in 2011, and it didn’t end well then. In July 2011, the Dow Jones fell for nearly 2 weeks and quickly corrected on fears of a downgrade of US debt before an agreement on the debt ceiling and budget was reached.
“In 2011, the massive sell-off was a great buying opportunity, and I expect the same to be true in 2021 if that happens this year as well.
“But first, we’ll have to face the pain of the sale.” –Tracey Ryniec
Have a good week-end!
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