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You undoubtedly remember how the market short-circuited on May 17th and plunged about 2% on allegations that President Trump interfered in an FBI investigation. With former FBI Director James Comey set to testify on Thursday, investors aren’t taking any chances of something like that happening again. In addition, that same day will see the U.K. general election, which some polls have as much closer than first expected.
As a result, the market finished lower again on Tuesday. The S&P was off 0.28% to 2429.3, the Dow declined 0.23% to 21,136.2 and the NASDAQ slipped 0.33% to 6275.1.
Despite the market sluggishness, the portfolios were more active on Tuesday than yesterday. Zacks Counterstrike felt it was finally time to add a short, while also selling a position for a profit. Meanwhile, Stocks Under $10 reached its goal of 20 positions with a buy, while Short List swapped out three positions. Learn more below:
Today's Portfolio Highlights:
Zacks Counterstrike: With the S&P finally hitting 2430, Jeremy feels comfortable in adding a short again. Luxoft Holdings (LXFT) recently missed on earnings and issued a fiscal year guidance that was below expectations. After trading down to $58 after the report, it has since rebounded to about $65. The editor doesn’t think this can hold, especially since LXFT has entered a big technical shorting opportunity and has slipped to a Zacks Rank #5. The portfolio will only take a 7% allocation for now with expectations of the stock testing the 200-day moving average at $57. By the way, Jeremy also sold Hasbro (NASDAQ:HAS) for a nearly 8% return. Read the full commentary for more on these moves.
Stocks Under $10: The portfolio is finally up to 20 names with today’s addition of Camtek (CAMT), a Zacks Rank #2 automated optical inspection systems company. The market is beginning to notice this company after soaring 86% since May 8. The editor sees good revenue growth for this year and next. The full write-up has a lot more on this new addition, including reviews of its earnings, estimate revisions and valuation.
Zacks Short List: The portfolio swapped out three positions in this week’s adjustment. The stocks that were short-covered today included:
• Amazon.com (NASDAQ:AMZN)
• ConocoPhillips (NYSE:COP, +5.3%) and
• Apache Corp. (NYSE:APA)
The new buys that replaced these names are:
• Cheniere Energy (LNG)
• PDC Energy (PDCE) and
• Qorvo Inc. (QRVO)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Surprise Trader: "As worries rise over various geopolitical issues—the Middle East spat, the UK vote, and the Comey hearing—investors are looking to protect themselves with additional safe haven assets. This has led to a burst of buying in gold, Treasury bonds, and volatility too.
"Uncertainty levels are rising in a number of markets, and I think traders are just being cautious. It doesn’t help that no one knows what to expect from Comey, and that the UK vote is becoming a real contest as well. Given this reality, I’d look for some more bets on protection in the near-term, at least until we get some more clarity on a couple of these key outstanding issues." -- Eric Dutram
Options Trader: "The markets inched lower again today. Nothing of any importance. Just feels like a pause after the solid breakout thru 2,400 in the last two weeks.
"There could be some position squaring ahead of James Comey's testimony on Thursday. But I don't expect any revelatory news to come of it. Especially after headlines later this afternoon showed that sources close to Comey say he will stop short of saying Trump tried to obstruct any of the investigations.
"But even though I think Thursday will be spectacularly anticlimactic, these investigations are likely to linger for a long time. And quite frankly, the market and DC has adjusted to the ridiculousness of it all." -- Kevin Matras
Have a Great Evening,
Jim Giaquinto
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