No Energy To Follow Through

How frustrating! Just when you think the NASDAQ has turned a corner and the S&P is ready to challenge 2500, we get a day like this one. The major indices didn’t give back all of yesterday’s gains, but the two mentioned did surrender more than half. It looks like energy was the big stumbling block, as oil dropped by nearly 2% today to under $44.

“While the correlation between the S&P and oil has faded, if oil dips below the $40 mark we could start to see them trade together again,” said Jeremy in Zacks Counterstrike “We started to see that when crude oil broke $44 around 5 AM this morning, causing the S&P futures to dip lower. Selling was pretty tame, but continued to grow into the end of the day.”

The S&P declined by 0.67% today to 2437 and the Dow slipped 0.29% to 21467.1. After gaining more than 1.4% on Monday, the NASDAQ gave a good chunk of that back on Tuesday with a drop of 0.82% to 6188.

The most action in the portfolios today came from Healthcare Innovators, which added three “highly-speculative” names. Stocks Under $10 also added to bring that portfolio up to 20 names, while Short List only had one swap in this week’s adjustment. Get all the info below:

Today's Portfolio Highlights:

Stocks Under $10: The portfolio is back up to the target size of 20 names with today’s addition of Aerohive Networks (HIVE), a Zacks Rank #2 that helps telecoms utilize the cloud. The company has beaten five times and matched once in the past six quarters, and Brian Bolan believes it is only about a year or so away from profitability. Earnings are expected to grow 34% this year and then 38% next, while revenue should trounce the industry average by growing 13% in 2018. The editor thinks HIVE will be a winner for the portfolio, and rumors that it may be a takeover target by Alphabet (NASDAQ:GOOGL) doesn’t hurt either. Read the full commentary for more.

Healthcare Innovators: The portfolio added three highly speculative buys on Tuesday. Two of them come in the wake of the American Society of Clinical Oncology (ASCO) conference, while the third is a super small Israeli company. The buys are:

• Epizyme (EPZM): Shares of this emerging biotech fell hard after the conference, but have since recovered on some favorable Phase II interim data for one of its cancer drugs.

• Immune Design (IMDZ): This emerging biotech has “only” climbed 12% since the start of the conference early this month, which is actually less than some of its counterparts. But its data presentations for a Non-Hodgkin's Lymphoma treatment were favorably received and led to some raised price targets.

• ReWalk Robotics (RWLK): This company makes wearable robotic exoskeletons for people with spinal cord injuries. Shares recently spiked on a prototype for a soft suit exoskeleton to assist stroke survivors. However, Kevin warns that there are some special risks for this company that you should know about.

Read the complete commentary to learn more about those risks and to get specifics on each of these picks and their innovative treatments.

Zacks Short List: The portfolio had only one swap this week, as it short-covered ConocoPhillips (NYSE:COP) for a 1.1% return and then added Vertex Pharma (VRTX). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Reitmeister Trading Alert: "The action Monday had the distinct look of a market ready to break higher. The action Tuesday says the exact opposite as we retreat from recent highs following a nasty Risk Off session.

"I do not believe there was any fundamental catalyst behind this move as there was no serious economic data to speak of. Plus, the folks in DC did nothing special (which we are all getting used to).

"Simply stated...investors were not ready for a breakout higher. Perhaps that comes later this week. Or next week. Or the week after. But soon enough it should be ready to push higher with 2500 likely in hand before the next earnings season gets underway in mid July." -- Steve Reitmeister

All the Best,
Jim Giaquinto

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