About time! After a dismal Thanksgiving week that saw each of the major indices drop by around 4%, the market finally got a bounce as investors returned from a long holiday weekend.
The NASDAQ jumped 2.06% (or about 142 points) on Monday to 7081.85 as tech found a pulse after days of slumping. Each of the beaten down FANGs improved by at least 1%. Unsurprisingly on this “Cyber Monday”, Amazon (NASDAQ:AMZN) was out in the lead with a 5.3% jump. Apple (NASDAQ:AAPL) plunged about 11% last week on fears of slowing sales for iPhones, but it recovered 1.35% today.
The S&P advanced 1.55% in the session to 2673.45 and the Dow was up 1.46% (or about 354 points) to 24,640.24.
Stocks enjoyed some welcomed relief on Monday from the problems that plagued most of last week. In addition to the improvement in tech, crude oil advanced more than 2% coming off its seventh straight week of declines.
Also, with the economy still strong despite the market correction, there’s a lot of optimism for this holiday shopping season. Unofficially, it kicked off on Black Friday and today retailers are looking forward to one of the biggest days for online buying of the year. (Of course, most of us will be spending money online and offline right up to Christmas.)
So will the market be able to build on this over the next few days? There are some events coming up that will have a big say in that regard. We’ll be getting minutes from the recent FOMC meeting. Investors will be watching for any signs that this sharp correction has opened some wiggle room in the plan for more rate hikes in 2019.
And the G-20 meeting in Argentina starts on Friday. The market is not expecting a deal between the U.S. and China that will put this trade conflict to rest, but it wouldn’t take much to give stocks a jolt that could end this frustrating year on a high note. A handshake between President Trump and President Xi, a smiling photo op, and a lack of tough trade talk in the aftermath could go a long way. Of course, cancelling any additional tariffs would be the best first step in soothing the issues between these economic leaders. Let’s see what happens…
Today's Portfolio Highlights:
Momentum Trader: With the G-20 meeting set to begin on Friday, Dave is expecting a busy week of moves in the portfolio. The editor kicked things off on Monday with the addition of Vericel (VCEL), a Zacks Rank #1 (Strong Buy) developer of patient-specific expanded cellular therapies. The stock is breaking out to new highs and could really take off if the market rights itself. In addition, VCEL has put together several straight quarters of positive surprises with an average beat of nearly 55% in the past four. Read the full write-up for more on this new addition.
TAZR Trader: The market started the first day back from the Thanksgiving holiday with a nice rally, which could be confirming a short-term low. Despite persistent macro worries about tariffs and interest rates, Kevin wanted to initiate a short-term bullish play as institutional investors stand ready to jump back in on any sign of improvement in the historically positive month of December. The vehicle that the editor will use for this play is good old ProShares UltraPro QQQ (TQQQ), his favorite tech leverage move. Read the full write-up for more in this buy, including the odds for success and Kevin’s initial objective.
Black Box Trader: This week's adjustment included three swaps. The stocks that were sold today included:
• Spirit Airlines (SAVE)
• Interpublic Group of Cos. (IPG)
• Jacobs Engineering Group (NYSE:JEC)
The new buys that replaced these names are:
• Express Scripts (NASDAQ:ESRX)
• Molina Healthcare (MOH)
• MetLife (NYSE:MET)
Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Zacks Confidential: Kids aren’t the only ones wondering if Santa is showing up this year. In fact, investors may be even more anxious about it after the rough months of October and November. Jeremy Mullin thinks the market may be able to rally out the year if a few conditions are met, so Kevin Matras gave him the reins to the Zacks Confidential this week. Learn what has to happen to get the market off the “Naughty List” and discover three stocks to pick up before you-know-who arrives by clicking: Will Santa Show Up This Year?
All the Best,
Jim Giaquinto
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