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Everyday seems to bring something new for the market to worry about. In just the past few sessions, we’ve moved from a “trade war” with China, to the FBI’s raid of President Trump’s lawyer, and now it’s all about Syria.
The market has been holding up rather well amid all this consternation; it headed into today with gains in 5 of the last 7 sessions. But the major indices took a step back on Wednesday.
The NASDAQ spent a good amount of time on the positive side as Facebook (NASDAQ:FB) again moved forward while CEO Mark Zuckerberg testified for a second day on Capitol Hill. However, it had slipped 0.36% by the end of the day to 7069. Meanwhile, the S&P was off 0.55% to 2642.2 and the Dow slipped 0.90% to 24,189.5.
The main problem today came from President Trump’s twitter once again, as he taunted Russia that missiles “will be coming” to Syria in response to that government’s alleged chemical-weapons attack on citizens over the weekend. As we’ve seen with North Korea and China in the recent past, the market isn’t a big fan of tough talk from the President.
“The market chopped in anticipation of bombs falling in Syria. While bombing isn’t a huge negative for stocks, Russian involvement is. There has to be some agreement with Russia to take fear out of the marketplace. We will see what happens, but I’m hoping to add to current positions before the weekend,” said Jeremy in Counterstrike.
And it didn’t help that recently-released FOMC minutes sounded rather hawkish to some and left open the possibility for more than just the three expected rate hikes this year.
The editors can’t wait until earnings season. It’s expected to be a good one and might put more focus on the economy and the market if only geopolitical and Washington concerns can just cool off for a while. Surprise Trader is especially excited about the season, which is why Dave bought three names on Wednesday that have positive Earnings ESPs and report next week. The editor also took a double-digit profit and bought a new holding in Momentum Trader.
The other active editor today was Brian Bolan, who swapped out cyber security names in Technology Innovators, while adding a tech name to Home Run Investor. Learn about all of today’s moves in the highlights section below:
Today's Portfolio Highlights:
Surprise Trader: Earnings season is upon us, so this portfolio will be picking up the pace in the coming weeks. Dave started today with a trio of buys. All of the stocks have positive Earnings ESPs for reports coming next week. They are also in different industries to spread around the risk. The new buys are:
• Mellanox Tech (MLNX) – a semiconductor company that beat by 20% last time. The next report is before the bell on Tuesday.
• ETrade (ETFC) – the online brokerage has beaten for ten straight quarters and is seeing earnings estimates rise for its next report after the bell on Thursday, April 19.
• Nucor (NYSE:NUE) – this steel manufacturer is the riskiest play due to the China-US trade ruckus. Nevertheless, it beat by 18% last time and the earnings strength is likely to continue when it reports before the bell on Thursday, April 19.
Check out the full write-up for more on all these moves, including the sale of Lamb Weston (LW) for an 8.3% return.
Technology Innovators: The portfolio swapped out cyber security names on Wednesday. Palo Alto Networks (PANW) was sold after it bought an Israel-based security company in what Brian Bolan considers a defensive move designed to ward off any potential takeover overtures. The editor feels that the M&A premium that pushed up the stock will be sucked out. Therefore, he decided to sell PANW now and bank a nice return of approximately 25%. The new buy is Fortinet (FTNT), a Zacks Rank #2 (Buy) from the same industry that will be reporting earnings in about a month. Read the full write-up for more.
Momentum Trader: It hasn’t even been two months since being added, but Paycom (PAYC) is a big enough winner already that Dave would like to take some profit. He sold half the portfolio’s allocation in this cloud-based software solutions company on Wednesday and took home a solid return of about 23%. Now he’ll let the rest of the position run for a while.
The editor also bought Vistra Energy (VST) today with a 12.5% allocation. He was surprised to see a utility stock make his screen, but this name seems to be breaking out and should continue to move higher in the intermediate term. Plus, rising earnings estimates has made it a Zacks Rank #2 (Buy). Read the complete commentary for more on these moves.
Home Run Investor: As he stated in Stocks Under $10 yesterday, Brian Bolan is looking to add more tech names right now. On Wednesday, he picked up ScanSource (SCSC), a Zacks Rank #2 (Buy) point-of-purchase tech provider that is pretty close to its 52-week low at $31.40. But the editor thinks the stock is on its way to getting back towards its highs of more than $45. Plus, it has a “wonderful valuation”. Read more about it in the complete commentary.
Have a Great Evening,
Jim Giaquinto
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