Remember, we need your input to make next week’s new Zacks Ultimate Strategy Session episode the best it can be. There are two ways you can participate:
1) Zacks Mailbag: In this regular segment, Kevin Matras will answer your questions ranging from current market conditions, general investing wisdom, us-age of the Zacks Rank or any resources of Zacks.com and more. Pretty much anything goes.
2) Portfolio Makeover: Sheraz Mian and Kevin Cook will review a customer portfolio to give feedback for improvement. No need to send us personal information such as dollar value of holdings. Simply email us with all of the tick-ers you own.
Just make sure to email your submissions for either one, or both, by Thursday morning, April 4. Email now to mailbag@zacks.com.
Stocks continued their slow by steady progress on Wednesday while keeping one eye on renewed trade talks and the other on Friday’s jobs report.
OK, so you’ve heard this maaany times before, but… it appears that the trade negotiations are going pretty well. According to White House economic advisor Larry Kudlow, China has actually admitted that the U.S. “has a point” when it comes to IP theft. That could be a big factor in getting a good trade deal done.
Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are back at the table with China’s Vice Premier Liu He in Washington this week. Are we finally going to get a breakthrough? It feels like we’re really approaching the finish line, but it’s best not to get too excited until we see a signing ceremony.
The NASDAQ again had the best performance of the day, as semiconductors had a solid session on trade deal optimism. The index advanced 0.60% to 46.86. The S&P was up 0.21% to 2873.40. Both of these indices now have five-session winning streaks.
The Dow was back in the green after a Walgreens-induced pullback on Tuesday. The index threatened to finish in the red again after squandering a more than 100-point advance, but it ultimately stayed on the plus side by 0.15% (or 39 points) to 26,218.13.
It wasn’t all good news on Wednesday, though, as the ADP (NASDAQ:ADP) employment report fell well short of expectations. The main news on this issue will be Friday’s Employment Situation Report. Most folks immediately discounted last month’s surprisingly weak report as a fluke brought on by extenuating circumstances (correction, shutdown, etc).
However, the ADP number reminded this nervous market about last month’s bizarre reading, in which the economy added only 20,000 jobs instead of the expected 180,000 to 200,000. The market wouldn’t be as forgiving a second time. Fortunately, people are still expecting to see a much more robust jobs report later this week. Just like they’re expecting a trade deal sooner rather than later.
Let’s hope they’re not disappointed on either front.
Today's Portfolio Highlights:
Home Run Investor: Did you know that airlines can lease aircraft instead of buying them? And if that’s what they want to do, then they’ll probably be calling Fly Leasing (FLY). This Zacks Rank #1 (Strong Buy) acquires and leases commercial jet aircraft under long-term contracts to a diverse group of airlines around the world. It does plenty of business with Airbus. The company has a great history of beating earnings expectations, while earnings estimates for this quarter nearly doubled over the last 90 days. In addition, Brian Bolan likes its valuation and that it has avoided almost all the headwinds from the recent Boeing (NYSE:BA) drama. He thinks this stock “looks like a winner”, so he added it to the portfolio on Wednesday. Read the complete commentary for more.
Surprise Trader: "Semiconductor stocks, also known as chips, reached record highs today. Coming off the lows on Christmas Even down at 1,066, the Philadelphia Stock Exchange’s Semiconductor Index has surged about 40%. Today’s close at 1,464.2 was a new all-time high for the index. What’s even more impressive for me is the fact that the index has gapped up on multiple sessions and held close to highs over the last week.
"This is trade optimism at its finest. The reason for the negativity in the industry was chalked up tariffs and potential fallout from the trade war. With that risk slowly dwindling, investors are getting back to putting large multiples on tech stocks. Sprinkle in positive news for big chip stocks like AMD and you have a recipe for some serious movement.
"Plenty of optimism surrounding getting a trade deal done. Many fear that this could be a “buy the rumor, sell the news” event. I think that the positive ramifications will be so strong that the bulls will overpower the sellers on the news. I think a short-term shakeout is very likely." -- Dave Bartosiak, who is also editor of Blockchain Innovators.
Until Tomorrow,
Jim Giaquinto
Recommendations from Zacks' Private Portfolios:
Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>
Zacks Investment Research