Despite bobbing up and down all week, the major indices go into Friday’s session with gains through the first four days… and even a couple record highs! Of course, there’s a big piece of data coming out tomorrow that could be the deciding factor for this first week of August.

The S&P advanced 0.60% today to 4429.10, which marks its second record close in the past three days. The Dow rose 0.78% (or about 271 points) to 35,064.25. These indices are up nearly 0.8% and 0.4%, respectively, moving into Friday.

The NASDAQ has been the most consistent of the major indices by closing in the green each day this week. On Thursday, it was up 0.78% (or almost 115 points) to a new record of 14895.12. The index is vastly outperforming its counterparts with a gain of 1.5% over the four days.    

It was a respectable performance heading into the major event of the week: the Government Employment Situation report. The number is always newsworthy, but it’s all the more important these days because jobs are a big factor in the Fed’s policy decisions. An in-line print probably won’t cause too many ripples, but a surprise could have a significant impact on the market.  

"This critical employment data could be market moving if there are any material surprises. The health of the US jobs market is the principal factor the Fed is focused on as they decide on a tapering timeline, and any shocking figures on this front could quickly shift the stock market's ceaseless bullish narrative,” said Dan Laboe in Headline Trader

"In tomorrow's July employment data, economists are estimating 845k net new jobs (compared to 850k in June), an unemployment rate of 5.7% (5.9% in June), and a 0.3% hourly wage increase (in line with June),” he said.

It’s actually been a week full of employment news. Today we got a jobless claims number of 385,000 for last week, which was pretty much inline with expectations and an improvement from the previous week. It was also the first result below 400K since mid-July. And on Wednesday was the ADP employment report, which said that private payrolls added 330K in July. The result was only about half of what was expected.

We won't have to wait long for the jobs number tomorrow since it comes out before the market opens. Let's see what happens.

Today's Portfolio Highlights:

Surprise Trader: Despite three straight quarters of positive earnings surprises, shares of Rackspace (RXT) have come under pressure. However, earnings estimates advanced to the point that this company is now a Zacks Rank #2 (Buy). Once again, this is the divergence that Dave likes to see with shares moving down but estimates moving up. RXT is a tech services company that designs, builds and operates cloud environments. It has a positive Earnings ESP of 2.27% heading into the next quarterly release after the bell on Wednesday, August 11. The editor added RXT on Thursday with a 12% allocation, while also selling Materion (MTRN) for a slight loss after getting “stuck in the mud” with no follow-through after its report. Read the full write-up for more.  

Healthcare Innovators: The CRISPR names have been going crazy in recent days as ARK is investing heavily in the space (more on that below). Kevin was looking for more exposure and decided to buy the aptly-named CRISPR Therapeutics (CRSP) on Thursday after the stock was upgraded to a Zacks Rank #3 (Hold). Meanwhile, the editor also picked up Beam Therapeutics (BEAM) because he expects this biotech has 3X the upside to downside. Analysts upgraded the stock lately based on its cooperation deal with Apellis Pharma (APLS) and the success of Intellia (NTLA) with its in vivo gene editing programs. The portfolio sold Oncternal Therapeutics (ONCT) today, as well. Read the full write-up for more details on today’s action. Meanwhile, the rise in CRISPR names as mentioned above helped Editas Medicine (EDIT) jump 18.4% on Thursday, which put it among the top 5 biggest winners of the session. Pacific Biosciences of California (PACB) also made that list with an increase of 9%.

Stocks Under $10: When Brian added Cross Country Healthcare (CCRN) back in November 2020, he figured this healthcare staffing firm would be in some demand as covid was raging with no vaccine. The editor was right! CCRN is now the best performer in the portfolio with a gain of nearly 150% in a little over 8 months. It was the biggest mover on Thursday as well by climbing 24.7% after its quarterly report. In its second quarter, CCRN beat earnings estimates by 17.5% and the revenue expectation by 8.4%. That makes ten straight quarters of positive earnings surprises. By the way, Alto Ingredients (ALTO) also made the Top 5 today with a rise of 7.6%.

Income Investor: "First-time unemployment claims of 385,000 were in-line with expectations. We also got July’s private payroll data on Wednesday, which showed a gain of 330,000 jobs but fell way short of the 653,000 estimate; leisure and hospitality added the most jobs last month.

"July’s jobs report is significant because the reading will have some direct implications on what path the Fed may decide to take. Will the central bank begin any tapering policies? When will they do this? How fast or how slow will these policies take effect?

"Any change in the Fed’s direction, no matter what’s already priced in or what isn’t, has the potential to make investors nervous or make them more confident about the stock market’s direction. But we have two core advantages to weather any kind of market environment: dividends and diversity. Consistent cash payouts are a lovely little bonus in a bullish market, but they can provide security when the outlook turns bearish." -- Maddy Johnson

All the Best,
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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