No Friday Follow-Through

The major indices didn’t even think about following-through on yesterday’s rally. The market was encouraged by the House passing its tax reform bill on Thursday, but the good feeling had obviously diminished overnight. On Friday, investors were more focused on the uncertain road ahead, rather than the small hurdle that was just overcome. Now the Senate has to pass its version, and then the two need to be reconciled before hitting President Trump’s desk. And who knows what it will look like then!

“Keep your eyes on politics next week as that’s likely to be the main driver of market activity,” said Dave in Momentum Trader and Surprise Trader.

The Big 3 indices entered Friday’s session slightly in the green for the week, but they couldn’t close it out. The Dow declined by 0.43% to 23,358.2 and the S&P was off 0.26% to 2578.9, leading to weekly losses of 0.3% and 0.1%, respectively. These indices have now slipped for two straight weeks after rising in the previous eight. The NASDAQ was the bright spot. It declined by 0.15% on Friday to 6782.8, but it was up 0.5% for the full week.

In the portfolios, Technology Innovators and ETF Investor each bought on Friday. Learn about the moves below, along with some analysis from Counterstrike:

Today's Portfolio Highlights:

Technology Innovators: Shares of WorkDay (WDAY) are improving as we get closer to its November 29th report. The company provides enterprise cloud applications for human resources and finance. It has an excellent history at earnings time, having missed only once since 2014. Brian Bolan feels that WDAY would benefit from a “budget flush” into the end of the calendar year. He sees this name as a good long-term play, so it was added to the portfolio on Friday. Learn more about this addition in the full write-up.

ETF Investor: Tech giants like Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) have all registered strong results thanks in large part to growth in their cloud businesses. They plan to continue investing heavily in this new model of computing, which makes it one of the fastest growing and hottest markets. Neena has found an ETF that provides diversified exposure to this niche space…First Trust Clouding Computing ETF (SKYY). The fund utilizes an approach that focuses on tech giants with diversified revenue streams, rather than younger, more riskier names. Read a lot more about this new addition in the complete commentary.

Counterstrike: "In what felt like another holiday session, stocks chopped around in very low volume ahead of the holiday week. Unfortunately, there was no follow through to the upside from yesterday's move and stocks couldn't finish higher.

"I don't think there is much to look into when it comes to today's session. After five weak days, yesterday erased any hopes for the bears to see follow through lower. So now we sit at wait for the Senate to get tax reform done. If an acceptable plan is passed, expect the S&P to march to 2700 into January.

"Then things will get really interesting as the Fed will look to increase the speed of interest rates hikes. We already know that we will see a hike in December, the question will be how many will come in 2018. I expect rising interest rates to be the biggest risk to stocks in 2018. The Fed has done a good job thus far, but investors should at least think about how new leadership in the fed will handles rates going forward. If they move too fast, it could harm stocks." -- Jeremy Mullin

Have a Great Weekend,
Jim Giaquinto