The week ended on a downer Friday with a softer-than-expected GDP report for the first quarter. While this disappointment had an impact on today’s session, the week as a whole was strong for the major indices as the S&P climbed 1.5% and the Dow increased 1.9%. The NASDAQ was the most impressive, though, with a gain of 2.3%, thanks to a few solid tech performances from the likes of Amazon and Google.
The last five days have been packed with newsworthy events, such as a French presidential election, a first glimpse at the President’s long-awaited tax plan, and numerous earnings reports. Of course, the latest market mover was that 0.7% reading for last quarter’s GDP, which led the S&P lower by 0.19% to 2384.2 on Friday. The Dow was off the same percentage to 20,940.5, but the NASDAQ slipped by only 0.02% to 6,047.6.
Next week will be another whirlwind. Earnings season has been pretty good so far and it will continue its frantic pace when we get back to work on Monday. We’re also all set for the next round of monthly economic reports, including ISM Manufacturing/Services, ADP employment and the Government Employment Situation. Will the S&P and/or Dow join the NASDAQ at new highs? Or will we continue to just loiter around? And what does Washington have in store for us?
Regardless of what happens, the editors are preparing plans for any eventuality. In the highlights section below, RTA gives you an idea of its strategy in the coming days. You can also take a look at the buys made by Surprise Trader and Insider Trader. Finally, this was the first week or our new Healthcare Innovators portfolio, and it has already picked a couple of winners. Give it all a look right now:
Today's Portfolio Highlights:
Surprise Trader: The portfolio added two stocks today that are scheduled to report next Wednesday: Delphi Automotive (DLPH) and Energizer Holdings (ENR). Both are Zacks Rank #2s, have VGM Scores of A, and enjoy a solid earnings history. DLPH is a play on the broader connected car/autonomous vehicle trend and has a positive Earnings ESP for the upcoming quarter. ENR has an average earnings surprise of more than 20% over the past four quarters and an Earnings ESP approaching 6% for next week’s report. Eric added each with a 12.5% allocation. Read the complete commentary for a lot more on these new additions.
Insider Trader: Tracey still likes the bank trade in 2017, but decided to get out of SBCF and FNB on Friday because they are both small and little followed. Instead, the editor added a 10% position in Flagstar Bancorp (FBC), which is one of Michigan’s largest banks. Earlier this week, the CFO and the Chief Risk Officer bought shares of their own company. There’s nothing rare about that, except when you consider that these two insiders were buying FBC at its highs after the Q1 report. They apparently agree with analysts that Q1 will be the company’s weakest quarter and that things should pick up in Q2 and beyond. Learn a lot more about this new addition in the complete commentary.
Healthcare Innovators: This new portfolio has been the busiest service this week with 10 buys in all…and a couple of them are already paying off. Edwards Lifesciences (EW) was one of the inaugural six picks added on Tuesday. After the bell on that same day, it reported strong first quarter results with a 14.6% positive surprise and sales growth of 26.7%. Shares popped 11% the following session. Meanwhile, Regeneron (REGN) was added yesterday and jumped about 5.6% today, which made it among the top performing stocks of all the portfolios. Read more about this new portfolio in the complete commentary.
Reitmeister Trading Alert: "Looking ahead for the month of May I think there is 45% chance of breaking above 2400 and an equal 45% chance of just continuing to consolidate in a range under 2400. That leaves a small 10% chance of stocks crumbling below 2300…odds of that negative outcome are lower than the recent past because most people realize that some form of tax relief is on the way this year.
"Those prospects say that investors should be mostly bullish at this time. Also, they should use any subsequent dips to load up on more Zacks #1 Ranked stocks.
"Here is our strategy given this outlook. If the breakout above 2400 occurs we will join that rally by putting our cash to work in new long positions. And if we consolidate by moving lower in the range, then I will look to buy dips. Either way it says you should expect a fair amount of trading to take place in May." -- Steve Reitmeister
Have a Great Weekend,
Jim Giaquinto
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