Rallying Into the Holiday

This end-of-the-year rally didn’t take an early start to the holiday, as the major indices continued making new records on this eve of Christmas Eve.

The Dow had the strongest performance, thanks in part to a nearly 3% advance for Boeing after the aerospace giant’s CEO stepped down amid the ongoing 737 Max scandal.

The index climbed 0.34% (or nearly 100 points) to 28,551.53. Meanwhile, the NASDAQ now has a 9-day winning streak with a gain of 0.23% (or around 20 points) to 8945.65. The S&P spent its third consecutive day above 3200 by inching higher 0.09% to 3224.01.

While we saw low volume on Monday due to the holiday, the major indices still managed another session of all-time highs. It reached new records four times last week!

Stocks have been in a good mood since the U.S. and China agreed to a Phase 1 deal in principle the week before last, and we recently got news that China will cut import tariffs beginning January 1 for a number of products.

This comes a few days after President Trump tweeted about a “good talk” with President Xi of China and that a formal signing is being arranged.

The already optimistic market is hoping that such news means that the relationship between the two countries is improving and will continue to blossom as they work on more phases of their trade negotiations.

Hey, Christmas is a good time for hope! And it helps when stocks are having strong performances like last week’s, which saw the NASDAQ jump by 2.2%. Meanwhile, the S&P was up 1.7% and the Dow advanced 1.1%.

However, this week won’t offer as much opportunity. In addition to the lower-than-normal volume due to Christmas, the market will be closed for a half-day tomorrow and a full day on Wednesday.

Let's see if the spirit of the season can keep stocks moving higher in the shortened week ahead.

Today's Portfolio Highlights:

Stocks Under $10: The portfolio wants to have plenty of tech stocks as it gets positioned for the New Year. Therefore, Brian added Immersion (IMMR) on Monday. The company develops hardware and software technologies that enable users to interact with computers using their sense of touch. The editor likes the valuation and the topline growth of 24% in the most recent quarter. The stock has been rising this month and Brian wouldn’t be surprised to see it return to $8.25 or more moving forward. Read the full write-up for more on this new pick.

Black Box Trader: The portfolio swapped out four names in this week’s adjustment. The stocks that were sold included:

• Applied Materials (AMAT, +7.8%)
• SS&C Technologies (SSNC, +1.8%)
• D.R. Horton (DHI)
• Fidelity National Financial (FNF)

The new buys that filled these open positions are:

• Charter Communications (CHTR)
• Cosan Ltd. (CZZ)
• Everi Holdings (EVRI)
• Photronics (PLAB)

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,
Jim Giaquinto

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