Advertisement
Markets

Stock Market Today: Apple Sprouts Wings, Stocks Rally Into the Weekend

Apple (AAPL) blasted higher again Friday after clearing the $2 trillion mark, helping yet again to drag the broader indices forward.

Rosier economic data lifted the broader markets Friday, but much of the day's progress can be credited, once again, to Apple (AAPL) and a handful of other large tech winners.

The National Association of Realtors reported a second consecutive record monthly increase in existing-home sales – a 24.7% jump from June to a seasonally adjusted annual rate of 5.86 million in July, which could keep housing market stocks booming. Also, IHS Markit's flash readings for American manufacturing and services were both up in July; scores of 53.6 and 54.8, respectively, signal improving environments for both.

But while the S&P 500 gained 0.3% to a record-high 3,397, more than half of its components were lower for the day.

Advertisement - Article continues below

Helping lead the charge was Apple (+5.2%), which now accounts for nearly 7% of the S&P 500, as the index is weighted by market value. Apple exceeded $2 trillion by that measure on Thursday and pushed farther ahead Friday, closing at a value of $2.13 trillion just days before it's set to split its stock 4-for-1.

However, CFRA analyst Angelo Zino, who has a Buy call on AAPL and raised his 12-month price target from $460 per share to $502, says he's looking past the stock split.

Advertisement
Advertisement - Article continues below

"We are turning our attention to AAPL's all-important event in September, which will lay out the company's new hardware devices (e.g. phones and wearables)/business prospects for the next year," he writes. "We think the possibility of AAPL beginning to bundle different Services (e.g. Music and TV+), which could be announced next month, would be a bigger catalyst and support recent multiple expansion to the shares."

Advertisement - Article continues below

Chipmaker Nvidia (NVDA, +4.5%), which reported blowout earnings Wednesday, also surged. The catalyst: Jefferies analyst Mark Lipacis raised his price target on shares to $570 and compared it to Apple for its potential to dominate.

"We think the company will continue to surprise on the upside, and wouldn't be surprised to see NVDA undertake more M&A to build out its data center system capabilities," Lipacis says.

The Dow Jones Industrial Average also finished in the black Friday, up 0.7% to 27,930, and the Nasdaq Composite continued to set new all-time highs with a 0.4% gain to 11,311. The small-cap Russell 2000, however, declined 0.8% to 1,552.

The Gap Between Stocks and the Economy

Many market observers have noted the clear discrepancy between the stock market's strength and the American economy's sluggish recovery.

So, when will the U.S. economy catch up?

A large number of high-profile retailers set to report earnings next week might provide a little illumination. A UBS Research Big Data dive provides some insight, too – specifically, it suggests a "significantly slower August recovery."

Advertisement - Article continues below

"The high-frequency data that together suggest this slowing pace of recovery include steady but slow improvement in steel production, little recovery in rig counts, trucking diesel production steadying below pre-Covid levels, steady rail traffic and containerized import orders, and others," writes UBS Strategist Ajit Agrawal. "Retail spending has normalized in official data, though remains below normal in ours. Our data suggests there has been little improvement in retail spending over the past 9 weeks."

There are plenty of things to learn about bull markets, and one of them is that while the economy and stocks are connected, they're not handcuffed to one another. Investing in a bull market in the midst of a recession certainly requires a little threading of the needle.

The top stock picks for a market like this need, among other things, to have recession-resistant characteristics and/or have businesses that are uniquely tailored for today's challenges, including continued social distancing … but also must be in a position to benefit if economic activity does return to normalcy. Here, we look at 20 such stocks.

Advertisement
Advertisement

Most Popular

18 Things You Can't Return to Amazon
Smart Buying

18 Things You Can't Return to Amazon

Before tossing these items into your virtual shopping cart, be sure to read Amazon's return policy first.
September 17, 2020
Insurance for Long-Term Care at Home
retirement

Insurance for Long-Term Care at Home

In the wake of COVID-wracked nursing homes, increasingly more people are looking at options to age in place with long-term care insurance.
September 17, 2020
Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

There's Medicare Part A, Part B, Part D, medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare --…
September 16, 2020

Recommended

Stock Market Today 9/18/20: Wild Friday Features More Woes for Tech
Markets

Stock Market Today 9/18/20: Wild Friday Features More Woes for Tech

Big Tech stocks Apple (AAPL), Amazon.com (AMZN) and Microsoft (MSFT) all declined on a wobbly 'quadruple witching' Friday.
September 18, 2020
Kiplinger's Weekly Earnings Calendar
stocks

Kiplinger's Weekly Earnings Calendar

Check out our earnings calendar for the upcoming week, as well as our previews of the more noteworthy reports.
September 18, 2020
Stock Market Today 9/17/20: Stocks Can't Shake Fed Hangover
Markets

Stock Market Today 9/17/20: Stocks Can't Shake Fed Hangover

Evidence of a slowing economic recuperation reinforced some of the Fed's worries, leading to a broad drawdown in Thursday's trading.
September 17, 2020
Stock Market Today 9/16/20: Fed Frazzles Stocks, But Buffett Scores Big
Markets

Stock Market Today 9/16/20: Fed Frazzles Stocks, But Buffett Scores Big

The Federal Reserve spooked stocks Wednesday by painting a gloomy picture of the economy, but the sun shined on a norm-breaking Buffett investment.
September 16, 2020