Small Gains Still Bring New Records

All we need for another round of all-time highs is positive closes in the indices… and that’s exactly what we got on Tuesday!

Stocks weren’t as excited as they were on Monday, but there’s still enough good vibes left over from the Phase 1 agreement to keep the trend pointed upward.

The Dow rose 0.11% (or more than 31 points) to 28,267.16 and the NASDAQ improved 0.10% (or about 9 points) to 8823.36.

The S&P could only gain 0.03% (or a little over one point) to 3192.52… but, again, that was enough for an all-time high!

While the indices did sell off into the close, they managed to push their winning streak to 5 days and make even more history as we close out 2019.

In addition to last week’s trade agreement, it doesn’t hurt to see U.S. housing starts rise 3.2% in November to 1.365 million, which was more than expected and another positive piece of data for the economy.

And the House took a long enough break from its impeachment obsession to pass a $1.4 trillion spending package, which then moves on to the Senate and to President Trump. If all this happens by Friday (which it should), we won’t have to worry about a government shutdown.

Along with the market, the editors are feeling pretty good on how this year will end up. Fears of a December 2018-like collapse have mostly disappeared, just as the recession craze did earlier this year.

The next stop for the S&P appears to be 3200. If it doesn’t get there in the next few days, then even a minor Santa Claus rally after Christmas should get the job done.

Today's Portfolio Highlights:

Healthcare Innovators: When it comes to fighting cancer, you’ve got to be able to detect it and re-detect it on recurrence. That’s what Guardant Health (GH) is all about with its diagnostic tests that use specialized blood tests and liquid biopsy (examination of tissue). Sales are expected to soar more than 125% past $200 million this year, as fighting cancer is a big and growing market. Kevin has been watching GH for a while and wants to get in now that its under $80. He thinks it’ll be above $100 next year. The editor also considers the stock a nice replacement for Invitae (NVTA) in the mid-cap genetic/cancer diagnostics space. Read the full write-up for a lot more on this new pick.

Stocks Under $10: Stocks with good-looking charts have done really well for the portfolio, so Brian sees no reason to mess around with what’s working. On Tuesday, he added Avita Medical (RCEL), a medical technology company the develops and distributes products in regenerative and respiratory medicine. The editor said this stock has a “wonderful chart”, which shows that this more than $8 stock has soared from just over $1 at the start of 2019. It recently tested $10 and Brian thinks it gets back there again in early 2020. The addition of this Zacks Rank #2 (Buy) gets the portfolio up to 13 names. Make sure to read the full write-up on RCEL, which includes estimates, its regenerative medicine platform, valuation, and more.

Marijuana Innovators: On Tuesday, the portfolio added Akerna (KERN), a regulatory compliance technology company primarily in the cannabis space. Through its MJ Platform® and Leaf Data Systems® platforms, it provides clients and government entities with a central data management system for tracking regulated cannabis products from seed to product to shelf to customer through the complete supply chain. However, Dave warns that this is a VERY speculative investment in a company without a lot of financial information. So make sure to read the editor’s complete commentary for the reasons behind adding KERN.

Zacks Short List: The portfolio switched out a couple names in this week's adjustment, beginning with short-covering Ceridian HCM Holding (CDAY) and World Wrestling Entertainment (WWE). The new buys replacing these names are Eldorado Resorts (ERI) and Wynn Resorts (WYNN). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Counterstrike: "Market participants seem to be stalling the inevitable print of S&P 3200 as price stayed under that level all session. The action today was very lazy, with volumes low and very choppy trading throughout the day.

"That 3200 will print, its just a matter of when. While I think a sell off would be justified, there just isn’t much selling at all. Stocks are being marked up into year end and nobody seems willing to sell what they have until the new year starts.

"2019 is wrapping up quickly. With just a handful on economic data releases left, along with only a couple earnings to come, there really isn’t much to shake this market over the last nine trading sessions. Expect sleepy trading for the rest of the month." -- Jeremy Mullin

All the Best,
Jim Giaquinto

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