The market wasn’t fooling around today as the major indices built on Friday’s performance with a rally of more than 1% each to start the second quarter.
Positive manufacturing data offered some reassurance to investors who are growing increasingly nervous about slowing economic growth. Specifically, the ISM Manufacturing for March was 55.3, which was above February’s dismal 54.2. (Of course, we should remember that anything above 50 still denotes expansion.)
Just as importantly though, China also had a good manufacturing report. Perhaps it’s a sign that the good vibes coming from the trade talks are not exclusively on this side of the ocean. The talks will resume later this week when China’s Vice Premier Liu He makes his way back to Washington.
Good data and good feelings led to an awesome rally on the first day of April and of the second quarter. On a percentage basis, the NASDAQ had the best performance with a jump of 1.29% (or practically 100 points) to 7828.91.
Meanwhile, the Dow is above 26000 again after soaring 1.27% (or just about 330 points) to 26,258.42. The S&P continues to move past its own milestone of 2800 by gaining 1.16% to 2867.19.
All of the major indices finished right around their highs of the day.
It’s worth repeating how impressive the just-completed first quarter really was. The NASDAQ surged more than 16%, while the S&P jumped by about 13% and the Dow increased around 11%. We probably shouldn’t expect another quarter like that one for a while. However, no one knows how far this mostly optimistic market will run if we finally get a good trade deal and another decent earnings season.
Today's Portfolio Highlights:
TAZR Trader: Digital transformation initiatives are increasingly sweeping across large enterprises, and Kevin plans to take advantage with a 10% allocation in Pegasystems (PEGA). This Zacks Rank #1 (Strong Buy) provides CRM and business process management software to a wide range of industries, including banking, healthcare and telecom, among others. PEGA recently reported its fifth straight quarter of strong results, which included top and bottom line beats and a raised revenue guidance. The editor is most impressed with its high & tight bullish flag between $62 and $66 since that late February report. Read the complete commentary for a lot more on PEGA, including what the analyst have to say about the company.
Blockchain Innovators: If you have the guts to name one of your products “The Barcode of Everything”, then you’d better be utilizing blockchain to make it work. Fortunately, Digimarc (DMRC) is doing just that. This Zacks Rank #2 (Buy) says the barcode can be applied “to all media types enabling the efficient and reliable automatic identification, discovery and interconnection of everything”. Since it’s utilizing blockchain to get this done, Dave thinks it could continue to be successful. The stock has been rising recently, and the editor decided to get on the bandwagon by adding DMRC on Monday. Learn a lot more about this new buy in the full write-up tomorrow.
Black Box Trader: The portfolio nearly had a double-digit winner today as Dana (DAN) was sold for a gain of 9.7% in just a week. The service also sold Terex (TEX) on Monday. The new buys that replaced these names are Anthem (NYSE:ANTM) and WellCare Health Plans (WCG). Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.
All the Best,
Jim Giaquinto
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