The various broad-market indices all jumped Thursday despite little on the macroeconomic front to justify it.
The Labor Department reported 1.1 million initial unemployment claims for last week – a figure worse than expected and a sharp disappointment after the previous week's dip below 1 million filings.
"The incoming initial claims number was weaker than our expectations and the consensus, and the rise could be interpreted as a loss of momentum in labor markets," write Barclays Investment Bank's Jonathan Millar and Michael Gapen. "That said, we believe activity data are likely to be more uneven the further the economy moves away from the economic lockdowns put in place earlier this year.
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"Rapid, unambiguously positive momentum is likely to give way to a more normal ebb and flow of activity as businesses and households investigate ways to normalize activity despite elevated numbers of COVID-19 cases. Labor markets are no different in this regard."
A Philadelphia-region business reading declined from July to August, too. And stimulus talks remain in the mud. Republicans are now pushing a "skinny" stimulus bill that could include a $300 weekly unemployment "bonus" and a Paycheck Protection Program extension, but possibly no second round of $1,200 stimulus checks.
Nonetheless, investors weren't deterred. Instead, they continued to pile into mega-cap tech stocks that have led the market's resurgence. That drove gains for the likes of Apple (AAPL (opens in new tab), +2.2%) and Amazon.com (AMZN (opens in new tab), +1.1%) – two of the most productive stocks in Warren Buffett's Berkshire Hathaway portfolio – as well as Microsoft (MSFT (opens in new tab), +2.3%), Facebook (FB (opens in new tab), +2.4%).
Tesla (TSLA (opens in new tab), +6.6%) continued its recent red-hot rally, too. The electric vehicle stock eclipsed $2,000 per share just days away from its 5-for-1 stock split.
Wedbush analyst Daniel Ives, who has a Neutral rating and $1,800-$1,900 price range on TSLA shares, does have a bull-case target of $2,500 based on continued Chinese expansion.
"We believe that the China growth story is worth at least $400 per share in a bull case to Tesla as this EV penetration is set to ramp significantly over the next 12 to 18 months," he writes, "along with major battery innovations coming out of Giga 3 (million mile battery remains an elusive goal now in the grasp in our opinion)."
Those performances fueled a strong advance for the Nasdaq Composite, which finished up 1.1% to a record 11,264. The S&P 500 (+0.3% to 3,385) and Dow Jones Industrial Average (+0.2% to 27,739) enjoyed more modest improvements, and the small-cap Russell 2000 retreated 0.5% to 1,564.
A Couple Tips for Upgrading Your Portfolio
Feeling a little bit of investment paralysis? You're probably not alone. While the market sits at all-time highs yet again, a number of catalysts – sky-high stock valuations, election uncertainty, a slowing economic recovery and more – are threats to recent gains.
One suggestion: Look for ways to improve your portfolio that are completely in your control.
For one, you can make sure that more of your money is going into your own investments, rather than into a manager's pockets. That's why we frequently tout the virtues of low-fee actively managed funds like those in the Kiplinger 25, as well as the inexpensive indexed and active options in the Kip ETF 20.
You can scrape even more of that money back by paying attention to the "extras" online brokers dole out to get your business – broker promotions and perks such as credit card rewards and free funds can sweeten the pot even further.
Indeed, managing your money with the best online brokers can make a world of difference. A broker that provides not just cheap access to stocks and funds, but easy-to-access research, learning tools and an intuitive interface, will help you make better-educated decisions and give you more confidence to act. Read on to see which brokers made the top of our annual list, just released today.
Kyle Woodley was long AMZN, FB, MSFT and TSLA as of this writing.
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