The market’s uncertainties are really piling up at the moment, and now they’re coming from outside the U.S. It's not just worried about D.C. inaction and the upcoming earnings season anymore, but also Russia/Syria and North Korea. The immediate, kneejerk reaction of stocks was to take cover and move lower of course, but the major indices significantly narrowed those losses by the close.
The S&P had slipped only 0.14% by the end of the day to 2353.8, while the Dow declined a scant 0.03% to 20,651.3. The NASDAQ was off 0.24% to 5866.8. However, the Russell advanced 0.72% to nearly 1377. Money flowed into gold and other “safe haven” areas.
The editors are finding it difficult to put money to work in the current environment. It would help if stocks picked a direction so they could hop on the next leg higher or pick up some bargains on a move lower. Instead, stocks remain stuck in a range with all this uncertainty hanging overhead.
To make matters more static, this is a holiday-shortened week after a barrage of economic data but before the real start of earnings season. The weekly realignment for Short List provided all the moves on Tuesday, but the editors still had a lot to say.
Today's Portfolio Highlights:
Zacks Short List: In this week's realignment, the portfolio short-covered WYNN, WUBA and WY. The new buys that replaced these names are PTC Inc. (PTC), Terex Corp. (TEX) and The Williams Companies (NYSE:WMB). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Stocks Under $10: Who would’ve thought that wind turbines could be so profitable? Brian would! The editor bought Broadwind Energy (BWEN) back on March 31 because he thought the company had the foundation in place for excellent growth going forward. And today the stock hit a new 52-week high and was easily the best performing stock of the day among all the portfolios with a gain of 14.6%. The editor thinks it’s only a matter of time until this stocks hits double digits and beyond. But that wasn’t all. The portfolio also had the second top mover of the day as Maxwell Technologies (MXWL) advanced 9.5%.
Surprise Trader: ”Global tensions are definitely taking a toll on market sentiment, and it isn’t like we have really seen a de-escalation in today’s session either. If anything, things are becoming more unstable, as rhetoric against Russia over the Syrian issue is increasing, while North Korea noted that they are ‘ready for war’ following the U.S. decision to send a carrier group near Korean peninsula waters.
“In this kind of environment, it shouldn’t be a surprise that gold is rising, and that investors are seeking shelter in the safe havens of U.S. Treasury bills, as well as the Japanese yen. Another trouble spot is that of volatility. The VIX added another 7% today, and the index is up about 32% in the past month. While it is true that we were at an incredibly low level, we are now at the highest 2017 levels for this key benchmark.
“Uncertainty is rising and investors are looking to puts for protection. We haven’t really seen this materialize in the market just yet, but if these bets prove to be right, it could make for a volatile start to earnings season, and a rocky post-Easter trading period as well.” -- Eric Dutram
Options Trader: "The market remains in a relatively tight trading range after a strong start to the year.
"But as I mentioned yesterday, with earnings season just around the corner (the official kickoff is April 24th when Alcoa (NYSE:AA) reports after the close), the market is poised for more upside. In fact, over the last 8 years, the average annual return for the S&P each earnings season has been more than 2%.
"So any pullback between now and then will be a great opportunity to be a buyer. Likewise, any upswing will be just as bullish of an opportunity." -- Kevin Matras
Have a Good One,
Jim Giaquinto
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