Shaky Start to Trade Week

SPECIAL ALERT: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, October 9. Kevin Matras, David Borun, Jeremy Mullin and Sheraz Mian will cover the investment landscape from several angles in this informative event.

Don’t miss your chance to hear:

• Sheraz and David Agree to Disagree on whether resolution of the trade issue will spark a new stock market rally
• Kevin Matras answers your questions in Zacks Mailbag
• Sheraz and David 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.


This week is all about the trade talks scheduled to begin on Thursday, so it’s no surprise that the major indices would chop around on Monday and burn off some its nervous energy.  

The Dow lost approximately 150 points at its worst and gained about 80 points at its best in the session. It finished with a decline of 0.36% (or nearly 96 points) to 26,478.02

The S&P slipped 0.45% to 2938.79, while the NASDAQ dropped 0.33% (or about 26 points) to 7956.29.

The major indices are coming off a similarly indecisive week, which began with sharp selloffs due to soft economic data. However, the situation turned around in the final two sessions with a little help from a ‘goldilocks’ jobs report on Friday.

In the end, the NASDAQ managed a positive weekly performance, while the other two had their third consecutive weekly losses.

A news report from Bloomberg on Monday stated that China doesn’t plan on agreeing to any broad deal that might reform the way that country does business.

Needless to say, such a report cast a pall on the market because that’s exactly the type of comprehensive deal that President Trump wants in order to end this trade conflict.

However, we didn’t see one of those 1%-plus plunges that the market is susceptible to. In fact, the bulls brought stocks into the green twice on Monday, which is an encouraging thing moving into what's likely to be a volatile week.

Investors aren’t expecting a breakthrough on Thursday or Friday. Instead, just the fact that the two sides are meeting is encouraging enough for a market besieged by uncertainty.

So here we go! There’s going to be lots of headlines in the coming days about trade… and we know how much a headline can move this market. Better buckle up!  

Today's Portfolio Highlights:   

Stocks Under $10: The news that China doesn’t want a broad-based deal convinced Brian to make a couple moves on Monday. First of all, he decided to protect his gains in photomasks manufacturer Photronics (PLAB) by selling the stock for a 15% return in less than three months. The editor then added a stock from a space that enjoys a tariff exemption. He picked up solar company Vivint Solar (VSLR), which is a ‘rising tide lifts all boats’ play given the potential of its industry. Make sure to read the full write-up for more on all of today’s moves.

Healthcare Innovators: There’s a rising competitive landscape for Align Technology (ALGN) these days with new entrants like SmileDirectClub offering people with crooked teeth more options for clear straighteners. Most of the analysts that Kevin watches still think that ALGN is one of the brightest spots in the field. A pullback in shares to 2-year lows provided the editor with a great chance to get back into ALGN ahead of their next quarterly update on October 23. Read the full write-up for a lot more on this addition.  

Technology Innovators: After purging the big caps over the past few weeks, the portfolio is now “really thin” and looking for some new buys. Brian decided to add a name that was a big winner for the service earlier this year. He picked up cloud security play Zscaler (ZS), which was at a great entry point below $50. The editor originally bought ZS back in February and then sold it in April for a return of more than 37%! He’s hoping for more of the same this time around. Read the full write-up for a lot more on this addition.

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

• GMS Inc. (GMS)
• National Oilwell Varco (NOV)
• CenterPoint Energy (CNP)

The new buys that filled these open spots are:

• CVS Health Corp. (CVS)
• Newell Brands (NWL)
• 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.

All the Best,
Jim Giaquinto

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