Stocks Fall Short of Weekly Comeback

The market missed its opportunity to salvage the week as the major indices turned lower on Friday and ended their three-day winning streak.

Most of the damage came on Monday in the wake of the U.S. and China raising tariffs on each other after talks broke down. Stocks plunged on the news and set the table for what could have been a disastrous five days.

But then the market rallied for three consecutive sessions, leaving each of the indices in striking distance of recouping Monday’s losses and getting on positive ground for this bumpy week.

And it looked like we just might do it! Stocks reversed course after a weak open and were in the green around midday. 

But as we’ve been experiencing of late, the indices limped into the closing bell. In fact, this time they limped all the way into the red and dashed any hopes of fully recovering from the earlier selloff.

As a result, the NASDAQ was off 1.3% this week, while the other two indices were each off by less than 1%.

Investors shouldn’t be too disappointed, though. It could have been a lot worse after the early selloff, especially since the U.S. and China aren’t even talking to each other right now.

For example, the NASDAQ fought back from a 3.4% plunge on Monday!

As for today, the tech-heavy index dropped 1.04% (or about 82 points) to 7816.28. It was really all or nothing for the NASDAQ this week. It moved at least 1% each day.

The S&P slipped 0.58% to 2859.53 while the Dow dropped 0.38% (or about 100 points) to 25,764.

Unfortunately, it looks like this trade issue is sticking around for the foreseeable future. The U.S. is making it more difficult for companies to do business with China’s telecom giant Huawei. And now we’re waiting for more potential retaliation for the move.

So far, the economy is holding up just fine amid all this turmoil. Today’s consumer sentiment report came in at a 15-year high! Hopefully, it can remain strong despite all the uncertainty.

Today's Portfolio Highlights:

Value Investor: The Street has pretty much abandoned Newmark Group (NMRK), as this mid-cap mortgage REIT has plunged 41% over the past year. However, Tracey really likes the REITs during this trade conflict with China. NMRK is “dirt cheap” with a dividend that currently yields 4.3%. In addition to all the classic value stuff, the stock is also expected to grow earnings by 7.2% this year. With price targets currently higher than where the stock trades, the editor likes the potential here and added NMRK on Friday. Read the complete commentary for more specifics on the move.  

Home Run Investor: A China trade deal is no longer an investable thesis for Brian Bolan, so he decided to finally sell LOGI for a nice return of 12.3%. The editor replaced that name by adding Tenable Holdings (TENB), a Zacks Rank #2 (Buy) software security company. It has an excellent record of beating the Zacks Consensus Estimate, amassing an average surprise of 17% over the past four quarters. The most recent quarter included a beat of nearly 28%. Earnings estimates for TENB are moving in the right direction as its losses get smaller and smaller. Read the full write-up for more on today’s moves.

Surprise Trader: We may be at the tail end of earnings season, but there are still plenty of stocks scheduled to report in the next couple of weeks. Once such company is Intuit (INTU), a Zacks Rank #2 (Buy) provider of financial management and compliance software products. It has a positive Earnings ESP of 0.59% for the quarter being reported after the bell on Thursday. Dave considers this a replacement for the recently deleted Upland Software. Learn more in the complete commentary.

Large-Cap Trader: While most of the world is watching the U.S./China trade dispute, John has his eyes on Latin America. The price of iron ore rose above $100 per tonne recently, and the editor plans to take advantage with a 5% allocation in CIA Siderurgica (SID). The company is a leader in the Brazilian steel industry and can produce 5 million tonnes of crude steel per year. The editor thinks SID could go on a big tear from here. Read the complete commentary for more on today’s moves and analysis.

Technology Innovators: Big profitability, earnings growth and rising earnings estimates. That’s what Brian Bolan likes to see in an investment… and that’s what he got with today’s addition of Criteo (CRTO). This Zacks Rank #1 (Strong Buy) specializes in performance display advertising. In other words, its an ad placement company, which has been a hot spot lately. CRTO has a great history of topping the Zacks Consensus Estimate with a four-quarter average of 27%. The most recent beat was nearly 40%. “Firms like this are necessary tools for both the tech giants and the consumer facing companies that need to get their products in front of the right eyeballs,” said the editor. Learn more in the full write-up.

Have a Great Weekend,
Jim Giaquinto

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