One of the editors said that today’s session was like “watching paint dry”. And that’s to be expected on the day before Thanksgiving. The S&P entered Wednesday’s session just one point away from closing above 2600 for the first time, but it just couldn’t get there and finished lower by 0.08% to 2597.1. The Dow was off 0.27% to 23,526.2. Nevertheless, these indices are still just a stone’s throw away from all-time highs.
The NASDAQ, however, bucked the trend heading into the holiday by gaining 0.07% to another new record of 6,867.4.
With earnings season now largely over, tax reform will take center stage in the coming days. Not so much on Friday, as Congress will still be in recess and the market has only half a session. But next week, investors will be watching closely to see if the Senate can approve its tax proposal.
In the highlights section, Counterstrike offers a brief review of where the tax plan stands. Also, Home Run Investor and Momentum Trader both added today. Give it all a look below:
Today's Portfolio Highlights:
Home Run Investor: Earlier this month, Nova Measuring Instruments (NVMI) reported another positive earnings surprise. However, this company provided only an inline guidance instead of raising it…and that’s just not good enough for this earnings season. Shares dropped 14% on the news. Brian Bolan considers this selloff to be a buying opportunity, so he picked up NVMI on Wednesday for the portfolio. The company has four straight years of positive earnings surprises, and its share price is already recovering nicely and seems set to reach new 52-week highs. ZU subscribers may recall that the editor saw a similar pattern in UCTT for Stocks Under $10, and now that stock is up more than 180% in less than a month! Get more specifics in the full write-up.
Momentum Trader: Every now and then, Dave feels a bit dangerous and decides to chase a breakout. Case in point, the editor bought a 12.5% allocation in DAQO New Energy (DQ), a manufacturer of polysilicon and wafers in China. The stock soared a whopping 90% in the last 3 months, but its P/E of 5.93 is telling the editor that there’s room for more advances. This is most definitely a “buy high, sell higher” scenario, so it's not for the faint of heart. Read more in the full commentary.
Counterstrike: "I wanted to review the status of the tax plan as we head into the holiday weekend. No doubt there will be plenty of tax talk around the dinner table if politics comes up, so let’s see where we stand when it comes to timing.
"The house passed its bill on November 16th and the Senate is looking to get its version done by the end of next week. The GOP wants to hit the ground running right after the holiday and for now things are looking good for a passage by December 1st. While some republicans have had issues with parts of the plan, there is still the expectation that a bill gets through.
"The hardest part will be the reconciliation between the House and the Senate. The separate bills are far apart and there is a lot of negotiation left before anything gets to Trumps desk. I expect a compromise to get done, but there could be negative headlines along the way that could shake the market in December.
"If everything goes well for the GOP, a final bill gets to Trump before Christmas. This would provide a fresh spark for investors to keep buying into 2018." -- Jeremy Mullin
Happy Thanksgiving!
Jim Giaquinto
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