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'Tech Wreck' Makes for Rough Start to June

As if the trade conflict and economic slowdown concerns weren’t enough, the market can now also worry about regulatory measures against the tech giants that led most of this bull market.

Of course, such fears are nothing new. These names are constantly targeted by those looking to break them up or punish them for privacy issues.

However, now we have reports that the Justice Department is looking at Google and the FTC is watching Facebook.

The result was one of those ‘tech wreck’ sessions that we get from time to time.

The NASDAQ plunged on Monday by 1.61% (or about 120 points) to 7333.02. The index dropped 8% in May and has lost ground for four straight weeks.

The news took a big bite out of the FAANGs, with Facebook leading the way lower by sliding 7.5%. Also, Alphabet dipped 6.1% and Amazon was off 4.6%.

But it wasn’t all doom and gloom on Monday. The major indices fought back against the fear of regulation as well as soft reports for manufacturing and construction spending. They came off their lows by the close… even the NASDAQ came back from a loss of 2% at one point.

The S&P slipped only 0.28% to 2744.45. But the most impressive performance came from the Dow, which recovered from another triple-digit loss to come all the way back and gain 0.02% (or less than 5 points) to 24,819.78.

That’s nothing to write home about, but remember that this index has dropped for six straight weeks now and was off by more than 6% in May. Every little bit is appreciated.

We also received more tough talk on trade from China over the weekend, but the market seemed much more interested in technology. It knows that the best chance for any real news on this issue probably won’t come until the G-20 meeting later this month… and that’s IF the U.S. and China decide to get together.

In the meantime, investors may want to get ready for a bumpy ride… 

Today's Portfolio Highlights:

Marijuana Innovators:
You’ve undoubtedly heard the old saying that the people who really got rich during the Gold Rush were the ones selling the shovels to the miners. Well, Dave has found a company that goes right along with that idea. Greenlane Holdings (GNLN) sells accessory products that help customers enjoy marijuana products. In other words, they don’t deal in the cultivation, distribution or sale of the plant itself. Instead, the editor believes that GNLN has solved two of the bigger problems facing the industry: healthy ingestion (THC extracts) and responsible packaging (child-proof containers that comply with government regulations). Dave thinks the company has both of these areas covered, which was why he added GNLN on Monday. Read the complete commentary for a lot more on this pick.

Home Run Investor:
Despite the weakness of the market, Brian Bolan wants to get the portfolio back up to around 10 to 11 names. The service was down to 8 after a bevy of recent selling to protect returns. Therefore, the editor picked up Myers Industries (MYE) on Monday, which is a Zacks Rank #2 (Buy) maker of plastics and rubber for consumer products. The company has a great history of meeting or beating the Zacks Consensus Estimate. In fact, it hasn’t missed in more than a year-and-a-half. Earnings estimates aren’t moving much because analysts are cautious in the current environment, so Brian is using that hesitancy to buy MYE on the dip in preparation for a future uptrend. Read the full write-up for more.

Black Box Trader: This week’s adjustment replaced half of the portfolio. The positions that were sold include:

• Taylor Morrison Homes (TMHC)
• HP Inc. (HPQ)
• Xerox (XRX)
• Cummins (CMI)
• Abercrombie & Fitch (ANF)

The new buys that replaced these names are:

• Altice USA (ATUS)
• Flowers Foods (FLO)
• Flowserve Corp. (FLS)
• Loews Corp. (L)
• Hartford Financial Group (HIG)

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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