SPECIAL NOTE: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, September 11. Kevin Matras, Kevin Cook, John Blank, PhD, Tracey Ryniec, Neena Mishra, CFA, FRM, and Sheraz Mian will cover the investment landscape from several angles in this informative event.
Don’t miss your chance to hear:
• Tracey and Neena Agree to Disagree on whether the Fed should cut rates at its September meeting
• Kevin Matras answers your questions in Zacks Mailbag
• Sheraz and John choose one portfolio to give feedback for improvement
• And much more
So be sure to mark your calendar then log on to Zacks.com and bookmark this page.
A rough session for tech took a bite out of the market on Monday, yet the Dow still managed a fourth day in the green.
The index gave back a more than 100-point gain in the session, but recovered enough to advance 0.14% (or about 38 points) to 26,835.51.
The Dow is now barely within 2% of its all-time closing high set in mid-July, and about 2.1% away from its all-time intraday high from around the same time.
The S&P has been well within 2% of a record for the past several days. It was down 0.01% today to 2978.43. Given the slide in tech, especially software, the NASDAQ saw a steeper decline of 0.19% (or a little more than 15 points) to 8087.44.
The major indices are coming off a second straight weekly advance, which saw the S&P and NASDAQ each jump about 1.8% while the Dow rose 1.5%. Previous to these back-to-back gains, the indices had dipped for four straight weeks.
For the first time in a while, the market is a bit encouraged about trade since last Thursday’s news that the U.S. and China are planning for high-level negotiations in Washington early next month.
An exact date has yet to be set and skepticism is high that anything real will get done… but it’s much better than the two sides lobbing new tariffs at each other.
But long before any trade meeting, we’ll be getting a Fed meeting next week. The market again is demanding a rate cut. Most investors are expecting a quarter-point, but some are still holding out hope for a half-point.
So this could be shaping up to be a slow week as investors spend time positioning for the Fed news and watching for anything interesting from the ECB later this week.
A slow, steady and positive week may be just what investors need after all the recent fireworks in this headline-obsessed market.
Today's Portfolio Highlights:
Counterstrike: If there’s actually progress in the upcoming trade talks, it would certainly be a boon for the “Amazon of China”. But Jeremy thinks that Alibaba (BABA) will be just fine even if the talks go nowhere. The company recently reported its fourth straight positive surprise with a beat of 22%. Meanwhile, SolarEdge Technologies (SEDG) has now reported back-to-back impressive quarters, which helped shares to triple year-to-date at one point. However, both stocks have pulled back since their recent heights, giving the editor great entry points. The portfolio added BABA and SEDG on Monday with 10% allocations for each. Read the complete commentary for all the specifics on these new buys.
Blockchain Innovators: The fintech space has really embraced blockchain because it helps cut costs and improve margins. In fact, the industry has given this portfolio some of its biggest winners, so Dave is sticking to it by adding International Money Express (IMXI). This company is focused on offering its services throughout Latin America, and it appears to be working as IMXI was recently upgraded to a Zacks Rank #2 (Buy). Earnings and revenue are both expected to soar this year and next. In other news, the editor doesn’t have to be so defensive anymore and would like to increase the overall beta of the portfolio. Therefore, Dave thought this was a good time to sell retailing giant Walmart (WMT) for 11.5%. Read the complete commentary for more.
Technology Innovators: The chip names have been strong and enjoy much better valuations than the recently-beleaguered software space. With that in mind, Brian added Smart Global Holdings (SGH) on Monday, a Zacks Rank #2 (Buy) chip name with a “super low” 9x forward PE. The stock also has a “great” chart and Zacks Style Scores of “A” for both Value and Growth. SGH was up more than 5% on Monday, which the editor thinks is its large 16% short interest position getting squeezed. He believes the stock could be returning to recent highs around $32. Learn about all of today’s moves in the full write up and be ready for another buy before the week is out.
Insider Trader: Shares of Intel (INTC) are up about 10% this year, but are still well below its 2019 high. Tracey isn’t sure if the semis have hit bottom yet or not, but the cheap price for this chipmaking giant is just too tempting right now. Most importantly, the CEO and the CFO both bought shares of their own company on August 28 under a 10b5-1 filing, which buys shares on a set date that allows the insiders to get around the “quiet period” if necessary. The editor believes it’s a strong signal that these bigwigs are buying ahead of the next earnings report. The portfolio added INTC on Monday with a 10% allocation, which leaves enough cash for another buy this week.
Healthcare Innovators: Software is having a real nice selloff today, which is giving Kevin the opportunity to add a couple names that he’s been watching. In this portfolio, the editor picked up Healthcare IT leader Veeva Systems (VEEV), which he’s been waiting to enter under $150. The portfolio recommended investors start a position in VEEV on Monday and be ready to add down the road if it gets cheaper. Read the full write-up for more.
TAZR Trader: As with Healthcare Innovators, Kevin is using today’s sharp software selloff to pick up a solid name at a nice discount – versus where he sold it above $245 just 2 weeks ago. He’s getting back into The Trade Desk (TTD), a provider of a technology platform for advertising that has a long future of growth ahead. He re-adding it with a 5% to 7% allocation. See the complete commentary for more specifics.
Black Box Trader: All four of the stocks leaving the portfolio this week are positive, including a double-digit winner. The positions sold today include:
• Fossil (FOSL, +19.7%)
• KBR, Inc. (KBR, +9.7%)
• CVS Health (CVS, +8,1%)
• General Motors (GM, +7.8%)
The new buys that replaced these names are:
• Caleres (CAL)
• D.R. Horton (DHI)
• National Oilwell Varco (NOV)
• T-Mobile US (TMUS)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Have a Great Evening!
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