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Market Seems Happy to Wait... For Now

Fed Chair Jerome Powell isn’t the only one being patient right now. The market is also tolerating a lot of uncertainty at the moment, as it waits for some real movement on deals for trade and to avert a government shutdown.

This positive sentiment led to another green session on Wednesday. The Dow rose 0.46% (or about 117 points) to 25,543.27. The S&P, which eclipsed its 200-day moving average yesterday for the first time in over two months, climbed another 0.30% to 2753.03. The NASDAQ advanced 0.08% to 7420.38.

The major indices came well off their highs by the close as the last hour of trading was uncharacteristically weak.

There’s plenty of good vibes coming from the trade meetings in China, but no details yet. It looks like President Xi of China may meet with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer later this week, and President Trump has already said the March deadline could be extended if progress is being made.

So far, it’s been enough for the market.

Speaking of the President, he hasn’t officially approved the tentative deal reached in Congress that would avert another government shutdown. In fact, he made it clear that he’s not very happy with it. But as with the trade deal, the market is pretty much counting on him approving it.

So we’re still waiting… but feeling pretty good about it! With the Fed turning more dovish and earnings season being as expected (with less earnings growth), the market seems willing to keep watch for now. Let’s hope their patience is rewarded sooner rather than later.

Today's Portfolio Highlights:

Home Run Investor: Chip names are “white hot” right now, so that’s where Brian Bolan went for today’s addition. Xperi Holdings (XPER), formerly known as Tessera Holding, is a Zacks Rank #2 (Buy) product and technology licensing company that manufactures semiconductors and related products. The stock moved higher after the last two quarterly reports, and it just so happens that XPER will be stepping to the plate again after the close on February 20. The editor is hoping for another positive reaction. He also likes the stock’s valuation. Read the complete commentary for more on this new addition.

Blockchain Innovators: The relationship between Akamai Technology (AKAM) and Mitsubishi UFJ Financial has been going very well. In fact, the two recently announced a joint venture dubbed GO-NET, which offers a new blockchain-based online payment network. Dave likes this partnership too… along with the string of positive earnings surprises for AKAM. The editor decided this was a good time to add this cloud services company to the portfolio. Read the full write-up for a lot more on AKAM.

Stocks Under $10: This portfolio has recovered very nicely from the correction. Brian Bolan’s new strategy of taking big gains more frequently has really paid off. He was at it again on Wednesday with North American Construction (NOA). This heavy construction & mining services company has been a strong performer for the service, but it seems to have run out of gas recently. The editor feels that the easy money has been made with this one. NOA was sold on Wednesday for a 21.8% return in about 5 months. Brian also sold Amkor Tech (AMKR) for a 7.8% profit.

Surprise Trader: The earnings trend for Osisko Gold (OR) dramatically improved after this gold miner’s positive surprise last quarter. In fact, shares climbed to around $10 from the mid-$7s. The company is scheduled to report again after the bell next Wednesday… and it has an impressive Earnings ESP of 11.11%. Dave thinks this stock is primed for another beat and maybe even another jump in price, so he added OR on Wednesday with a 12.5% allocation. The editor also sold CBOE Global (CBOE) for a return of 1.2%. See the full write-up for more on today’s moves.

Counterstrike: "It sounds like the talks are progressing well as Xi will actually meet with the U.S. representatives later this week. This gives us the notion that things are accelerating and perhaps we could see a deal by the end of the month.

"Once we are past China, that would be the third market risk knocked down over the last month. Assuming a deal is done soon, it means we have put to rest the Fed raising rates, the government shutdown(again), and China trade war(hopefully).

"Both the Nasdaq and the S&P are seeing selling at the 200-day. The news coming from China will determine if this level holds for the bears or not. Good news, 2800 should be in sights quickly. Bad news and a trip back under 2700 would be warranted."
-- Jeremy Mullin

Have a Great Evening,
Jim Giaquinto

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