Solid Start To September

Historically, September is the worst month of the year for stocks, and it promises to be even more challenging this time around considering the debt ceiling, budget negotiations and the (hopefully successful) push for tax reform. Given all this, it was at least a small psychological pick-me-up to see the major indices start this difficult time with a solid session.

The S&P completed a sixth straight day in the green with a gain of 0.2% to 2476.6, marking a weekly advance of 1.4%. The Dow was flirting with recapturing 22,000 on Friday, but it finished slightly below by increasing 0.18% to 21,987.6 in its fourth consecutive day on the plus side. But the NASDAQ was the big star, putting together its second day with a new all-time high as it climbed 0.10% to 6435.3. Equally as impressive, the index was up 2.7% this week for its best performance all year.

This solid session came despite a disappointing jobs report that was below expectations. Of course, we all know why that is. If the report isn’t blowing past estimates, then the Fed will likely be more hesitant in pulling the trigger on further rate hikes. At the same time, investors know that the economy is strong, as evidenced by several other reports this week including (but not limited to) the Q2 GDP estimate on Wednesday and this morning’s ISM Manufacturing report.

The portfolios had some big winners to close out the week. Stocks Under $10 decided to take some nice profits from one of its “safety” positions, while Surprise Trader had a double-digit return by halving a stock that’s rising in the aftermath of Hurricane Harvey. Meanwhile, Counterstrike picked up a medical devices company that's revolutionizing surgery. Get all the details below:

Today's Portfolio Highlights:

Stocks Under $10: This morning’s soft jobs report has tied the Fed’s hands when it comes to interest rates, according to Brian Bolan. He believes that stocks will continue to move higher now that rates will likely stay low, which means safety plays like gold will be out of fashion. So the editor sold IAMGOLD (IAG (LON:ICAG)) today while he could still get a solid return of nearly 25%. Read the full write-up for more. He’ll be looking to replace this name next week with a “risk on”-style play.

Counterstrike: Jeremy had been waiting for Intuitive Surgical (NASDAQ:ISRG) to break above its Zacks Rank #3 (Hold) status…but he can’t wait any longer! This robotics surgery company just keeps rising and has now surpassed $1000 per share. Its da Vinci Surgical System is groundbreaking with procedures growing 16% in the last quarter, which helped the company report its 9th straight positive earnings surprise. Before its 3-for-1 stock split early next month, the editor felt it was finally time to take a 10% allocation in ISRG for the portfolio. Read the full write-up for more.

Surprise Trader: After the devastation caused by Hurricane Harvey, Houston and the impacted areas are going to need help from building material companies like Owens Corning (OC). As a result, the stock has had a nice run of late. Ahead of the three-day weekend, Eric decided that now was a good time to sell half of OC and take a 13.5% profit. The editor also sold half of Dover Corp. (NYSE:DOV) for 1.1% after the company finally moved into positive territory.

Enjoy the Long Weekend!

Jim Giaquinto