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Another Positive Week Despite Rough Friday Session

Published 04/22/2018, 09:15 PM
Updated 07/09/2023, 06:31 AM

The major indices took another step back on Friday, but thankfully gains on Monday through Wednesday gave the market a second straight week in positive territory.

The NASDAQ suffered through another rough session for tech and slumped by 1.27% to 7146.1. The S&P was off 0.85% to 2670.1 and the Dow declined 0.82% to 24,462.9.

One of the big problems on Friday was Morgan Stanley (NYSE:MS)'s warning of soft iPhone sales in the June quarter, which marked a second straight blow to Apple (NASDAQ:AAPL) after Taiwan Semiconductor’s warning yesterday of weak demand for smartphones. Shares of Apple dipped 4.1% today after a slide of nearly 3% yesterday.

Also complicating matters was fear of rising rates as the 10-year Treasury yield is knocking on the door of 3%.

Despite the listless market of the past few days, the good news is that each of the major indices managing to squeak by with weekly gains. The NASDAQ still advanced about 0.55% this week amid all the concerns about semiconductors and Apple. The S&P was up 0.52% and the Dow increased 0.42%.

Today's Portfolio Highlights:

Options Trader: The portfolio’s bear put spread in Essex (ESS) expired fully in-the-money today as it closed just below the furthest out strike of $240. Therefore, the position brings a profit of 135%. Kevin added this position back in November by buying to open an April 250.00 Put AND selling to open an April 240.00 Put. The move worked out just as planned with the position bringing its maximum profit potential. Get more specifics in the complete commentary.

Insider Trader: "Stock bulls tried to elbow their way to the front of the line this week as strong earnings reports took front and center, reminding investors that there was more going on than worries about trade wars and tariffs.

"Earnings worked to distract investors for about three days and then the geopolitical headlines, or tweets, came back into the picture, along with some fears about peak earnings, and that combined to give the bears the upper hand." -- Tracey Ryniec, who also manages the Value Investor

Counterstrike: "The last two days have not been kind to the bulls. The S&P has softly grinded its way back to below the 50-day moving average and now threatens a retest of the bottom of the recent trading range. The sell off was across the board, with the only safe place lying in the financials. Bonds were weak again, as the 10-year yield approaches 3%. This resulted in steady selling.

"Apple was the bad egg in tech, with the stock down over 4% on the day. Investors have been selling AAPL over the last two days as analysts are lowering their estimates for later in the year. Apple is such a big part of the Nasdaq, so when the stock is down it tends to drag everything with it.

"The market is acting like a bathtub full of water. It is just moving back and forth with no real conviction either way. This isn’t the next environment for stock picking, but we should be able to shift through the noise as more earnings come out." -- Jeremy Mullin

Have a Great Weekend!
Jim Giaquinto

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