Rising Stocks Ahead Of Rising Rates

The S&P and Dow picked up on Monday where they left off on Friday…namely making new all-time highs. And the NASDAQ came along for the ride as well, giving all three major indices a positive first session to the week.

The S&P was up 0.32% to 2660, while the Dow climbed 0.23% to 24,386. Both of these indices hit new records. The best performer of the day, though, was the NASDAQ, which jumped 0.51% to 6875.1. Obviously, technology was a big winner yet again on Monday, along with energy

Just like last week was about tax reform, a potential government shutdown and the jobs report; this week will be focused on the Fed meeting. Yellen & Co. are widely expected to raise rates for only the third time this year.

“You wouldn’t know it by watching CNBC, but it’s a Fed week! We will see a rate hike later week, which the market has fully priced in,” said Jeremy Mullin in Counterstrike. “The announcement is likely a non-event, but the language coming from Yellen could have an effect. I myself would love to hear some commentary on Bitcoin from the Fed more than anything.”

In the portfolios, Momentum Trader chased another stock on a pullback, while Technology Innovators added a company with exposure to the innovative Internet of Things space. Meanwhile, Black Box Trader swapped out four names this week, and one of them was a double-digit winner. Learn more about these moves in the highlights section below, along with a look at this week’s Zacks Confidential.

Today's Portfolio Highlights:

Momentum Trader: The portfolio has been chasing a lot of stocks recently, but Dave feels that it helps to offset some of the riskier positions in the service. He was back at it again on Monday with a 12.5% allocation in Orbotech (ORBK), a Zacks Rank #1 (Strong Buy) developer of AOI systems whose stock has dropped below $50 from a high of over $56. However, the CCI is starting to creep back up. Get more specifics about this new addition in the full write-up.

Technology Innovators: The Internet of Things [IOT] is already pretty big, and Brian Bolan thinks it will continue to grow for years to come. On Monday, the editor gained some exposure by picking up Forescout Technologies (FSCT), which is a security pure play for the IOT space. FSCT is new to the market and just announced a solid beat and raise performance in its first quarterly report. The stock is now moving back toward its all-time high. Read the full write-up for more on this new addition.

Black Box Trader: The portfolio had a big winner today in Holly Frontier (HFC), which was sold for a return of +27.3%. The other three deleted names were:

• Sprouts Farmers Market (SFM, +8.4%)
• HP Inc. (HPQ)
• Leucadia National (NYSE:LUK)

The four new buys that replaced these positions are:

• American Eagle Outfitters (NYSE:AEO)
• Guess Inc. (GES)
• MasTec Inc. (MTZ)
• Tailored Brands (TLRD)

Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Zacks Confidential: Technology has been the hottest sector all year, so there’s no way it can keep going in 2018 and beyond. Right? Kevin Cook says WRONG! He believes we’re in a “tech super cycle”, whereby innovative new industries and companies are born every year to continually refresh the space. Kevin Matras loves the idea, and he handed Cooker the keys to Zacks Confidential this week to explain. Learn why now is not the time to run away from tech and get four recommendations by clicking: The Technology Super Cycle.

All the Best,
Jim Giaquinto

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