Remaining Resilient Amid Trade Uncertainty

The market’s slow-motion pullback continued on Thursday, putting the major indices in danger of snapping their weekly winning streaks.

The NASDAQ had the roughest session by sliding 0.24% (or a little more than 20 points) to 8506.21. The Dow declined 0.20% (or nearly 55 points) to 27,766.29 and the S&P slipped 0.16% to 3103.54.

Investors aren’t as positive about Phase 1 as they’ve been for the past few weeks. Remember how we originally thought it would get signed in mid-November at an international conference in Chile? Oh well…

Instead, there have been several news stories recently about snags and possible delays, along with threats of higher tariffs from President Trump.

And Congress’ recent bill in support of Hong Kong protestors isn’t helping matters either.  

Of course, the two sides are still talking, and apparently China has invited U.S. negotiators to Beijing for face-to-face meetings. Though, it’s uncertain if the invitation will be accepted or if its even still open.

With all this back and forth, you can’t blame investors for getting a little dizzy. As a result, the rally that took us to new highs has stalled a bit in the past few days.

And now we go into Friday with the indices’ winning streaks in jeopardy.

The NASDAQ and S&P have been advancing for the past seven and six weeks, respectively. However, they are each down about 0.5% over the past four days.

The Dow had the roughest week so far and is down a little less than 1% through Thursday, which means its four-week streak is on thin ice.

Nonetheless, stocks are showing an impressive resiliency. Unlike the recent past, there have been no plunges of 1% or more in the wake of the latest trade headline. This suggests that the market is still feeling pretty good and is just one catalyst away from reclaiming those all-time highs.

Maybe we’ll get something tomorrow!

Today's Portfolio Highlights:

Surprise Trader: Shares of medical technology company Tactile Systems (TCMD) have soared in the three weeks since being added to the portfolio. Dave thinks this is a great time to take some risk off the table by selling half of the position for an approximately 32% return. The editor also added apparel retailer Guess? (GES) with a 12.5% allocation. This Zacks Rank #2 (Buy) has a positive Earnings ESP of 1.78% for the quarter coming after the bell on Tuesday, November 26. The company has beaten the Zacks Consensus Estimate in the past two quarters, including a surprise of more than 31% last time. GES is currently forecast to deliver 40.8% EPS growth this year and 25.72% next year. Read the full write-up for more on today’s moves.

Blockchain Innovators: The state of Wyoming is really opening its doors to this technology. For example, Wyoming Electric was recently approved for a new Blockchain Interruptible Service Tariff in an effort to “actively recruit blockchain customers to the state.” The utility is a subsidiary of Black Hills (BKH), a Zacks Rank #2 (Buy) energy company that generates wholesale electricity and produces natural gas, crude oil and coal. Dave decided to add this stock on Thursday to capitalize on the Wyoming opportunity. In addition to its future potential, the editor also appreciates that BKH will add some diversification to the service. Read the full write-up for more. 

Marijuana Innovators: It's been a great week for the marijuana space in what has otherwise been a rough year. Yesterday, a House committee voted to remove cannabis from the federal government’s controlled substances list, while also tackling a few other social justice concerns about enforcement. The news sent marijuana stocks higher on Wednesday… and that continued today. In fact, this portfolio had four of the top five performers in the session, including Aurora Cannabis (ACB, +18.2%), Canopy Growth (CGC, +15%), Aphria (APHA, +9.5%) and Tilray (TLRY, +7.2%).

All the Best,
Jim Giaquinto

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