Thankfully, this was a short week…because it sure was a stressful one. Hurricane Irma dominated the headlines as the potentially historic storm slowly makes its way to Florida. As if that weren’t enough, North Korea may launch another missile on Saturday as part of a DPRK holiday. These concerns made it difficult for stocks to gain any ground over the past four days, leading to weekly losses in the NASDAQ (-1.2%), the Dow (-0.9%) and the S&P (-0.6%).
The Dow was actually up in Friday’s session by 0.06% to 21,797.8. However, the NASDAQ dropped 0.59% to 6360.2 and the S&P was off 0.15% to 2461.4. Nevertheless, stocks have held up remarkably well amid all these challenges.
Looking toward next week, dealing with actual problems is always easier than waiting for them. By Monday, we’ll have a better grasp on just how bad Irma is. Also, we’ll know if there was a North Korean launch and what it means geopolitically.
In the portfolios, Momentum Trader bought twice on Friday as Dave had about 20% in cash to invest. He chose a biopharma company and a European foods name. Healthcare Innovators was also active today as Kevin added an innovative company in the “gene editing” field. Learn more below:
Today's Portfolio Highlights:
Momentum Trader: After selling RCL this morning, the portfolio had about 20% in cash to play with. Dave decided to split it between two names. Firstly, the editor wanted more exposure to the biopharma space since the Trump FDA is easier with approvals. He chose to add PTC Therapeutics (PTCT), which is focused on orally administered drugs for genetic disorders, oncology and infectious disease.
For something completely different, the portfolio also picked up Nomad Foods (NOMD). The company manufactures and distributes frozen foods in Europe. The stock is breaking out to highs at the moment. Make sure to read the full write-up for more on these moves, including a look at NOMD’s “great-looking” Price and Consensus chart.
Healthcare Innovators: After another great week in the portfolio, Kevin felt comfortable enough to buy another “highly speculative” name. He chose Editas Medicine (EDIT), a pharma company focused on the bleeding edge field of “gene editing” (hence its apt ticker). The company’s quarterly report last month included some positive developments for its pre-clinical programs, which led to a rising stock price and increased institutional attention. The editor is confident that the long-term potential rewards easily outweigh any nearer-term risk. This is the portfolio’s first CRISPR stock, so make sure to read the complete commentary to learn exactly what that means.
Insider Trader: "By Monday, (Hurricane Irma) will have passed but the recovery will just be beginning. I have a feeling stock investors will mostly still be sidelined next week. There are simply too many people displaced and distracted.
"There's no doubt that third quarter GDP will likely take a temporary hit due both Harvey and Irma. There simply are too many people not going to the office or their jobs.
"Additionally, dozens of companies from restaurant chains, to cruise lines, to the petrochemical companies in the Gulf, have had their operations disrupted. Even a single day shut down for a restaurant chain can make or break the quarter.
"All of this should be temporary, however. The US economy has an amazing ability to ramp back up to speed quickly." -- Tracey Ryniec
Counterstrike: “The VIX was up 5% as traders bought up protection for the weekend. The fear is clear and involves two elements: North Korea and Irma.
“Because of this uncertainty over the weekend, there was no reason to enter a new position today. I know I said this last week, but I think next week we will finally pick a market direction.
“Looking back over the charts, the recent pullback in the S&P futures brought us into a Fibonacci support zone with targets at 2493. Since then, we have chopped in a converging triangle. Once we breakout of this chop, we should go straight up or straight down. A move below 2440 would make me pretty bearish, while a move back over 2470 would likely bring 2500.” – Jeremy Mullin
Have a Good Weekend,
Jim Giaquinto
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