In the aftermath of Friday’s solid rally and with a trade deadline looming in the near future, it’s totally understandable that stocks would take a bit of a break as we start a new week.
Stocks sold off right into the close as the major indices snapped their three-day win streak, but the overall losses were not that severe… especially when compared to all the gains we’ve been enjoying of late.
The NASDAQ slipped 0.40% (or just under 35 points) to 8,621.83, while the Dow was off 0.38% (or a little more than 105 points) to 27,909.60. The S&P was down 0.32% to 3135.96.
Stocks are coming off an impressive Friday performance that saw each of the major indices advance by around 1% or more following a strong jobs report.
The U.S. economy added 266,000 jobs in November, crushing expectations of around 185,000. The resulting rally helped the indices save face after what had been a challenging week up to that point.
But there was nothing that dramatic on Monday. Instead, we’re still in limbo when it comes to a trade deal, while the deadline for additional tariffs (Dec. 15) just keeps getting closer and closer.
However, the market doesn’t seem too concerned about it right now. Not yet, at least. Sure, stocks will drop on a negative headline, but they’re always ready to rally again on a positive one and stay in the neighborhood of their all-time highs.
We’re not stuck in a malaise as we were last December.
Before the deadline, though, is a Fed meeting this week. The Committee isn’t expected to do very much since it has already cut rates three times this year. So it is unlikely to be a big deal unless there’s some sort of a surprise.
Today's Portfolio Highlights:
Counterstrike: After being stuck in a trading range over the past year, it looks like HealthEquity (HQY) is on the verge of a breakout. That’s what can happen when you beat earnings estimates by 113% and raise the fiscal 2020 guidance! This Zacks Rank #1 (Strong Buy) provides solutions for health care account management, health reimbursement arrangement and flexible spending accounts. Jeremy thinks the stock will consolidate around the 200-day before breaking higher and maybe surpassing $80. The editor added HQY on Monday with a 10% allocation.
The portfolio also picked a 10% allocation in Velocityshares 3X Long Crude Oil ETN (UWT), a triple leveraged ETF that will move 3X that of crude oil futures. Jeremy considers this a “purely technical”, short-term move to take advantage of a nice setup coming in the next month. Read the full write-up for more on all of today’s moves.
Black Box Trader: The portfolio cashed in a double-digit winner among the seven changes in this week's adjustment. The stocks that were sold today included:
• Tenet Healthcare (THC, +23.7%)
• Best Buy (BBY, +4.4%)
• DaVita (DVA, +1.3%)
• Synaptics (SYNA, +0.18%)
• Newell Brands (NWL)
• Vector Group (VGR)
• Quanta Services (PWR)
The new buys that replaced these names are:
• Applied Materials (AMAT)
• Builders FirstSource (BLDR)
• Fidelity National Financial (FNF)
• RH (RH)
• Target (TGT)
• Tesla (TSLA)
• The TJX Cos. (TJX)
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,
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