Stocks Fight Past Tax Uncertainty

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After snapping a long winning streak last week, stocks got back to the plus side on Monday with slight advances. There’s been no revelations in the tax debate since Friday, so the market still has a big question mark hanging over its head about whether corporate tax cuts will be delayed or not. (There’s also a lot of concern about tax reform getting passed at all.) Nevertheless, after a weak morning, the major indices fought their way into positive territory and managed to stay there through the close.

"In what looks to be a theme leftover from last week, stocks gapped down from weakness overseas, but then bounced into the green and continued higher into the cash close,” said Jeremy in Counterstrike.

The S&P climbed 0.10% to 2584.8, while the NASDAQ increased by the same amount to 6757.6. The Dow contributed with a 0.07% advance to 23,439.7. In addition to the tax uncertainties, the market also had to fight through a more than 7% plunge in GE after the conglomerate said it would cut its dividend in half.

The only portfolio making moves in this groggy Monday session was Black Box Trader, which swapped out three names. Read about the changes below, along with this week’s Zacks Confidential and some analysis from Momentum Trader and Insider Trader.

Today's Portfolio Highlights:

Black Box Trader: The portfolio swapped out three names in this week’s adjustment. It got out of:

• Tyson Foods (NYSE:TSN, +4.2%)
• CNH Industrial (CNHI)
• Sysco Corp (NYSE:SYY)

The new buys that replaced these names are:

• Meritor Inc. (MTOR)
• Huntsman Corp (HUN)
• Mastec Inc. (MTZ)

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: If it’s time to talk about earnings season, then it’s time to hear from Sheraz Mian. So how has Q3 performed? What’s the projection for Q4? What’s the best way to position yourself for maximum profitability? In this week’s Zacks Confidential, Kevin asked Sheraz to answer these questions. Read his detailed quarterly report and get a couple of recommendations by clicking: Q3 Earnings Scorecard.

Momentum Trader: "The day finished in the green but barely with equities slow to wake up from the weekend. Early selling pressure relented and markets slowly drifted into positive territory.

"Early on it looked like the market wanted to selloff as the S&P 500 opened the session down at 2,576.53. Another two points lower was the end of the downside. I wanted to say that’s where the buyers stepped in but really I think it was just a lack of follow-through on the sellers which allowed the market to rebound and hover for the rest of the session.

"Call it lack of conviction if you will, either side of the fight today plain didn’t show up to work. The total range on the S&P 500 was about 13 handles. If you fast-forward past the first hour of the session then the market was stuck in a 4 handle range all day. Volume was much lighter than usual too with the S&P 500 only trading about 2/3 of its typical count." -- Dave Bartosiak

Insider Trader: “The focus is still on the passage of the tax plan. There aren't many congressional days left in the current session before the Christmas holiday. But if the Congress can pass it, even if just in the House, this could provide a much needed catalyst to move stocks to the next level.

“Speaker Ryan keeps insisting the House will vote on this tax plan by next week, before the Thanksgiving recess. But that leaves little time, when they come back, for the Senate to vote on theirs and for any bill reconciliation to take place.

“The small cap companies, in particular, really want the tax cuts by 2018.

“But, I'm more hopeful than I've been all year that something might pass. Stay tuned.” – Tracey Ryniec

All the Best,
Jim Giaquinto

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