Done Deal Helps Dow Close Above 29,000

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The U.S. and China finally have something down on paper in their nearly two-year long trade conflict, which helped the Dow close above a new milestone and at all-time highs.

After crossing above the mark a couple of times in recent days, the Dow finally managed a close above 29,000. It advanced 0.31% (or approximately 90 points) to 29,030.22. That’s a new record.

Also making history today was the S&P, which rose 0.19% to a new closing high of 3289.29. The NASDAQ inched higher by 0.08% (or a little more than 7 points) to 9258.7.

Since there were no surprises in the deal and it was largely priced into the market, the major indices gave back most of its gains in the back half of the session. For example, the Dow had jumped nearly 190 points at its height.

However, the S&P and NASDAQ were saved from losses by a late spike higher, which can be attributed to FINALLY GETTING A TRADE DEAL!

Look, we should certainly be questioning how much teeth this deal has, and it’s fine to be concerned that a Phase 2 might be even harder to put together.

But let’s just take a step back and appreciate that these two stubborn countries finally got something on paper after nearly two years of tough tweets and tit-for-tat tariffs.

So it makes sense that the bulls would take advantage of the afternoon plunge by buying in the final hour. We would all love the existing tariffs to be cancelled, but let’s just hope that today’s agreement is the beginning of something bigger.

With Phase 1 out of the way and USMCA expected to be passed this week, the market can refocus on earnings season. JPMorgan got things started on a high note yesterday, but subsequent reports from the big banks have been mixed.

Today's Portfolio Highlights: 

Home Run Investor: The portfolio is pretty heavy with tech and medical names right now, so Brian looked for some diversification in today’s buy. He picked up Air Transport Services Group (ATSG), a Zacks Rank #1 (Strong Buy) provider of air cargo transportation and related services. The company’s earnings have beaten the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 17% in that time. The editor thinks this name could get back to the $25 range after it reports in late February. ATSG replaces Tenable Holdings (TENB), which was sold today for a gain of 3.6% after slipping to a Zacks Rank #5 (Strong Sell). Read the complete commentary for more on today’s moves.

Income Investor: The iShares Global ETF (IOO) position has been a solid performer for the portfolio, but Maddy wants to make room for a higher-yielding pick. Therefore, she sold IOO on Wednesday for a 28.4% return. The editor also sold Crown Castle Int’l (CCI) while she could still get a 3.9% profit for a stock that has slipped to a Zacks Rank #4 (Sell). Maddy is planning some fresh picks in different industries over the next few weeks, so stay tuned!

All the Best,
Jim Giaquinto

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