The rally decided to take a three-day weekend. And why shouldn’t it? The Dow and S&P closed on positive ground and made all-time highs each day last week. It deserves to take a break as we prepare for another busy week of earnings and hope for momentum on the tax reform front.
“I attribute this to a weekend hangover that saw no overwhelmingly positive news to push stocks higher,” said Jeremy in Counterstrike. “The selling wasn’t aggressive but rather a slow and steady grind that accelerated late in the day when the ‘buy the dippers’ didn’t show up.”
The S&P was off 0.40% on Monday to 2565 and the Dow declined 0.23% to 23,274. The NASDAQ was down 0.64% to 6586.8. Technology and industrial stocks put the most pressure on the market. This week will see some BIG earnings reports from technology staples like Google, Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT).
Technology Innovators filled up half the portfolio last week with 13 additions, and now Brian Bolan will be adding at a more normal pace. Today, the editor only bought one name, but this new service is also the focus of this week’s Zacks Confidential. Meanwhile, Surprise Trader added twice as earnings season really picks up, while Black Box Trader had a double-digit winner among its four swaps. Learn more about all this below.
Today's Portfolio Highlights:
Technology Innovators: Silicon Labs (SLAB) hasn’t missed the Zacks Consensus Estimate in nearly 3 years, so Brian Bolan is feeling pretty good about its upcoming report on October 25. This stock is a play on the Internet of Things, as it makes microcontrollers, chips and sensors that allow wearables and other devices to connect to the Internet. Read more about this new addition in the complete commentary. The editor plans to add one or two more names later in the week. By the way, this portfolio was also the focus of this week's Zacks Confidential: Early Winners from Technology Innovators.
Surprise Trader: Earnings season is in full swing...and so is this portfolio. Dave kicked off the week with 12.5% allocations in two names. Sonus Networks (SONS) is a Zacks Rank #1 (Strong Buy) provider of wireless tech hardware that's part of a space in the top 18% of the Zacks Industry Rank. It reports before the bell on Monday.
The other buy today was Yelp (YELP), which has beaten earnings estimates for five quarters in a row. With a solid Earnings ESP for its report on November 1, the editor is expecting more positive surprises to come. The full write-up has more on these additions.
Black Box Trader: The portfolio swapped out four names in this week’s adjustment, and banked a double-digit winner along the way. The sold stocks were:
• Restoration Hardware (RH, +22.6%)
• Beacon Roofing Supply (BECN, +5.6%)
• Huntsman Corp. (HUN)
• CarMax Inc. (NYSE:KMX)
The new buys that replaced these names are:
• Meritor Inc. (MTOR)
• CNH Industrial (CNHI)
• Dana Inc. (DAN)
• HollyFrontier Corp. (HFC)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Insider Trader: "And now it's back to all the stock market action. Stocks closed at record highs again on Friday, but while they opened at new highs again today, they couldn't hold the momentum into the close.
"This is the first big week for earnings, with about 800 companies reporting including the tech titans like Alphabet (NASDAQ:GOOGL), Twitter, Microsoft and Amazon, as well as a bunch of Dow Jones Industrial names and a lot of the big cap S&P 500 companies.
"We should see a pick up in insider buying by the end of the week but, as I've said before, it always starts out slowly in the beginning of earnings season." -- Tracey Ryniec
Options Trader: "After six weeks of fantastic gains, a little backfilling and profit taking is not out of order.
"But with over 1,200 companies reporting earnings this week, I don’t expect the market top sit idle for long.
"Dips have been far and few between. So in this bull market, I’m a big proponent of buying the dips when they present themselves." -- Kevin Matras
Have a Good Evening,
Jim Giaquinto
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