SPECIAL NOTE: We’ve just released this quarter’s Ultimate Four report which includes four stocks our team believes have the greatest upside potential over the upcoming quarter. This latest report features favorite stocks from David Bartosiak, Ben Rains, Dan Laboe and Madeleine Johnson. Log on to Zacks.com to see these stocks today.
Here we go! We’re heading into the long-awaited G20 summit with stocks near all-time highs after completing a spectacular month of June and first half of the year.
Now it’s up to tomorrow’s meeting between President Trump and China President Xi. A positive result could have the indices making history in short order.
For the time being though, we’ll just have to settle for one of the better Junes in market history.
The NASDAQ jumped 7.4% this month, while the Dow soared about 7.2% and the S&P rose around 6.9%. These gains pretty much offset May’s sharp losses, leaving the market with great results for the first half of 2019.
The NASDAQ is up more than 20% so far this year, while the S&P is north of 17% and the Dow is higher than 14%.
Unfortunately, the market’s three-week winning streak is over, as Fed officials questioned the inevitability of an upcoming 50-basis point rate cut on Tuesday. However, stocks did rise on Friday.
The S&P increased 0.58% today to 2941.76, while the NASDAQ advanced 0.48% (or more than 38 points) to 8006.24. The Dow rose 0.28% (or over 73 points) to 26,599.96.
All three of the indices moved sharply higher in the final minutes and closed at session highs in hopes of a positive outcome for the trade talks.
And what would a positive outcome look like? The market isn’t being too demanding. As long as the two leaders don’t storm out of the meeting and start another round of tariffs, investors should be able to find something positive in the get-together.
While a complete resolution of the trade conflict is most likely impossible this weekend, the market would be happy if the two sides re-opened negotiations and postponed any additional tariffs.
That would probably be enough to begin the second half at record highs. Fingers crossed…
Today's Portfolio Highlights:
Options Trader: The Consumer Services – Misc. space is in the top 13% of the Zacks Industry Rank, and one of the big names from the group just broke out of a bullish symmetrical triangle pattern. That company is Rent-A-Center (RCII), which is a rent-to-own giant with a Zacks Rank #1 (Strong Buy) status. The strong chart tells Kevin that the stock is on its way past $30... and that's just for starters. The editor added a bull call spread in RCII on Friday by buying to open 7 December 27.00 Calls AND selling to open 7 December 30 Calls. If it gets to $30 or more by mid-December, the portfolio will make 160% on today’s action. Read the full write-up for more.
Healthcare Innovators: Shares of Sarepta Therapeutics (SRPT) soared more than 17% on Friday after a rival drugmaker announced disappointing results for a gene therapy for muscular dystrophy. SRPT reported promising data for the same disease last year. The stock was the best performer of the day across all of ZU. But that was just part of it! The portfolio actually had 4 of the top 5 winners today due to solid performances from Invitae Corp. (NVTA, +9.1%), Dermira Inc. (DERM, +6.6%) and Editas Medicine (EDIT, +5.7%).
Insider Trader: “Stocks are grinding. Everything is grinding higher on the hope that something good will be announced from the G20. I don't mind a grinding market. It's much more stable, and sane, than one where speculation is rampant. And look at the results.
“The Dow was up 7.2% in the month which was its best June since 1938. The S&P 500 added 6.9%, its best June since 1955. The NASDAQ surged 7.4%, its best June since 2000. For the first six months, the results are equally as impressive, with the Dow up 14%, the S&P 500 up 17% and the NASDAQ up 21%.
“Does a great first half mean the good times keep going?
“This was the best first half for the S&P 500 since 1997 when it was up 19.5%. Stocks finished up another 9.6% in the second half that year. That was also a secular bull market year. So I am bullish on stocks, especially if the Fed actually DOES cut. I think stock investors need to stay fully invested.” – Tracey Ryniec
Counterstrike: "I suspect positive rhetoric from the G20 to come out over the weekend and market to head higher next week. It just seems like that’s what the market is expecting this close to all-time highs. If I’m wrong and we see negative tweets, expect a rough Monday to start the week.
"Holiday week coming so I expect the low volume environment to continue. There should be some news on trade over the weekend, so we could see a big move Monday, followed by lower volatility throughout the week. The portfolio is long and strong as we head into the new quarter, with available cash for earnings season. I expect new all-time highs will come in the next month, along with a 3000 S&P print." -- Jeremy Mullin
Have a Great Weekend!
Jim Giaquinto
Recommendations from Zacks' Private Portfolios:
Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>
Zacks Investment Research