The Dow couldn’t stretch its winning streak to 10 weeks… but the NASDAQ could! Perhaps even more importantly, the S&P finally managed to close above 2800 as the month of March began with hopes of keeping this strong start to 2019 going. So far, so good.
The major indices threatened to give back all of this morning’s gains, but eventually rebounded enough for a respectable end to a rather dull week. The NASDAQ advanced 0.83% to 7595.35, marking its tenth straight week in the green with a rise of nearly 1%.
The S&P closed above 2800 for the first time since November after rising today by 0.69% to 2803.69. It was up 0.4% over the past five days, marking its fifth consecutive weekly advance and its ninth in the past 10.
The most frustrating performance, though, was the Dow. It managed a gain of 0.43% (or about 110 points) to 26,026.32… which is just fine at such a sluggish time. But it was down 0.1% for the week, which means its 9-week winning streak is over by the narrowest of margins. So close!
Trade news again led the market higher on Friday, as the U.S. and China are reported to be preparing a final trade deal that could be signed at a summit with President Trump and President Xi sometime in the next couple of weeks.
It couldn’t come at a better time! The market grew weary of trade talk recently after rallying in the previous two weeks on nothing but positive sentiment during the discussions. However, the market is still optimistic that some kind of agreement can be reached soon, and that was enough to keep the focus off of slower growth concerns such as this morning’s soft ISM Manufacturing Index.
Apart from any unpredictable trade headlines and a few more earnings reports, next week’s big piece of economic data will be the jobs report on Friday. Another strong reading could help calm investors’ fears of a weakening economy and tide us over until the trade deal gets signed.
Today's Portfolio Highlights:
Value Investor: When searching out more retail exposure for the portfolio, Tracey didn’t go for one of the big or trendy names in the space. Instead, she bought the small-cap family footwear retailer Shoe Carnival (NYSE:CCL) (SCVL). It will report Q4 results late this month, but the company already pre-announced solid sales for fiscal 2018. The editor was most impressed that this usually conservative company guided higher for fiscal 2019. Shares of SCVL are up big in the last year, but its still cheap. Plus, it’s a rare small-cap that pays a dividend. Read the full write-up for a lot more on this new addition.
Technology Innovators: When Brian Bolan added Ubiquiti Networks (UBNT) in late November, it was because the broadband wireless solutions company was resilient during the correction. But that was BEFORE the market took another header in December. But the stock proved to be even more resilient than expected with a profit of 31.3% through this morning. Brian decided to cash in that gain today as the editor does not believe this name will rally as much as others on a China trade deal. Meanwhile, the portfolio also sold Fabrinet (FN) for an 8.7% return to free up even more capital.
Technology Innovators also had the best performing stock of the day, as Zscaler (ZS) soared 21.9% after crushing earnings expectations and raising its guidance. This cloud security company has only been in the portfolio since February 11… and its already the second best performer in the service with an advance of 24% in that time.
Healthcare Innovators: Usually, this portfolio holds onto positions for a year or longer. But sometimes a stock does a year’s worth of improvement in just a week, which is the case with Tandem Diabetes (TNDM). This insulin pump maker recently enjoyed some good news from the FDA and solid quarterly results. Analysts are now sharply increasing their price targets. Kevin decided this was a great time to sell TNDM and secure an impressive 43% return in just a little over a week! By the way, if you haven’t made a move in Inogen (INGN) yet, don’t forget to review yesterday’s commentary and decide on your initial stake.
Meanwhile, gene therapy is still a hot space after Roche’s acquisition of Spark earlier this week. As a result, this portfolio again had a couple of the best performers of the day among all ZU names thanks to gains from Editas Medicine (EDIT, +14.6%) and CRISPR Therapeutics (CRSP, +12.9%).
Home Run Investor: With the U.S. and China taking their sweet time in getting a trade deal together, Brian Bolan decided he didn’t want to sit around with a volatile name like nLight (LASR). He took the gain on this position now because such uncertainty makes it difficult to know which way it will go from here. Therefore, LASR was sold on Friday for a 21.9% return in a little over two months. Brian also sold Tessera (XPER) for a 1.8% return after the stock slipped to a Zacks Rank #5 (Strong Sell).
Surprise Trader: The retail – computer hardware space is in the Top 1% of the Zacks Industry Rank at the moment… and it’s where Dave went for his final buy of the week. Tech Data (TECD) is one of the world’s largest technology distributors. The company reported a positive surprise of 37% in its last report and is now preparing to step up again next Thursday before the bell. Given its positive Earnings ESP for the quarter, the editor thinks it is poised to beat again. He added TECD on Friday with a 12.5% allocation. Read the full write-up for more.
Have a Great Weekend!
Jim Giaquinto
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