NASDAQ Slumps 2.6% This Week

This week was only four days long…and yet that was enough time for the NASDAQ to drop by 2.6%.

The tech-laden index’s troubles started on Wednesday when Facebook (NASDAQ:FB) COO Sheryl Sandberg and Twitter CEO Jack Dorsey testified in Washington about election tampering, privacy issues, bias and more. The fear of government regulation was a good excuse for investors to take profits from the hottest space in the market. And then on Thursday, chip makers added fuel to the fire after reports that memory chip demand may be soft.

The NASDAQ only dipped by 0.25% today to 7902.5, but when all was said and done the index had its worst start to September in years.

Tech also makes up a big part of the S&P, which slipped by 1% this week and was off 0.22% today to 2871.7. A little more than a week ago, the NASDAQ and S&P had put together four straight sessions of all-time highs.

The grand finale for the week didn’t come from tech, but from trade. As we all know, the U.S. stands ready to install $200 billion worth of new tariffs on Chinese goods at any moment. Then, President Trump said there was another $267 billion “ready to go on short notice”.

The Dow is most impacted by trade news like this, and the index did slump sharply at mid-day before rebounding. It was still the worst performer of the Big 3 on Friday by declining 0.31% to 25,916.5. For the week though, it was only off by 0.2%.

The most frustrating thing about today's negative headlines is that it overshadowed a good jobs report. The economy added 201,000 jobs last month, which was slightly better than expectations. But perhaps most importantly, the unemployment rate stayed at 3.9% and wages showed signs of growth.

Well, they say September is a rough time for the market. Fortunately, there’s plenty of month left to make this year an exception.

Today's Portfolio Highlights:

Momentum Trader: Dave’s stomach is still a bit upset after recent volatility at Attunity (ATTU), which dipped more than 1% earlier this week before rebounding. The editor thought this was a good time to get out of this cloud-based software company. Fortunately, he gets to bank a more than 80% return in just a little over 6 months!

Proceeds from ATTU were used to buy ANGI Homeservices (ANGI), which connects consumers with service professionals for home projects through their HomeAdvisor digital marketplace. You may know this company better by its previous name, Angie’s List. This Zacks Rank #2 (Buy) has jumped to more than $21 from $16, and Dave is hoping this momentum can continue. Read the full write up for more on today’s moves.

Large-Cap Trader: Shares of WellCare Health (WCG) have risen to the point where this managed care services company is now a fully-valued HMO stock. John thinks it's time to say goodbye to the position that has become the portfolio’s biggest source of profit. He first bought it in June 2017 and added to it twice afterward. Today it leaves with a return of nearly 71%! Since September is such a volatile month, the editor isn’t adding a new one today. Instead, he’s building some cash and will put it to work when opportunities arise.

Insider Trader: The 10b5-1 system is a plan that allows insiders to sell or buy automatically depending on their specific program. Most insiders use it to sell. However, the CFO of Calumet Specialty Products Partners (CLMT) used the system to BUY three times in August and September. Tracey sees this as a bullish bet on the company. The CEO also bought recently. CLMT is a small-cap refiner that has been paying down debt and looks to be moving toward seasonally high volumes and favorable margins. The editor decided this name would be a good pick for the portfolio, so she added it on Friday with a 9% allocation. Read the complete commentary for more on all of today’s moves.

Counterstrike: The editor’s plan was always to take some profits heading into the first weekend of this volatile month, and its especially important now that those new tariffs on China appear to be ready to go. The biggest winner was dining and entertainment chain Dave & Buster’s (PLAY), which has slipped to a Zacks Rank #3 (Hold). Jeremy doesn’t want to risk a selloff, so he sold PLAY on Friday for a 12.8% return…in less than a month! He also sold Adobe Systems (NASDAQ:ADBE) for an 8% profit and Goldman Sachs (NYSE:GS) for a 0.8% return.

Have a Great Weekend,
Jim Giaquinto