Another Small Gain Brings a New High

The market action of late would be considered rather boring under normal circumstances, except that stocks continue to make new highs!

The S&P only rose by 0.08% (or less than 3 points), but that was enough for a second straight record-setting session.

The Dow was less than two points away from another new high, as it slipped 0.01% (or 1.63 points) to 27,781.96. The NASDAQ dipped 0.04% (or a little more than 3 points) to 8479.02.

Interestingly, each of the major indices had one session this week where it was alone in record territory. The Dow on Monday, the NASDAQ on Tuesday and the S&P today.

Most importantly though, the indices are going into Friday’s session with gains for the week and impressive winning streaks.

The Dow is up by about 100 points since the close last Friday and is going for a fourth straight week of gains. The NASDAQ and S&P are each higher by only a few points as they look to add onto their runs of 6 weeks and 5 weeks, respectively.

We were feeling pretty good about that Phase 1 deal ever since it was announced about a month ago. But recently, we’ve been hearing about “snags” that might make an agreement more difficult than hoped.

Yet the market hasn’t sold off. In fact, it’s inched higher despite the uncertainty with trade and the Fed announcing that another rate cut in December is unlikely.

As long as the U.S. and China are still talking to each other, stocks can probably stay around new highs for a while longer.

However, we’ll probably need some kind of trade deal to really break out.

Today's Portfolio Highlights:

Income Investor: The holiday shopping season is the most important time of the year for retailers… so Target (TGT) isn’t messing around. The company wants to be the “go to” destination for toys this year, so it set up partnerships with staples of the space like Toys R Us and Disney. It is also devoting more floor space to toys and added more than 10,000 new and exclusive items to its inventory. And of course, TGT continues to offer everything else as well, from electronics and home goods to groceries and everyday items. The stock is up 66% year to date and offers a dividend that yields about 2.4%. Maddy is a fan of TGT both as an investor and as a consumer, so she added it to the portfolio on Thursday. Read her complete commentary for more on this new pick.

Insider Trader: The tariffs and rough weather have crushed the farming industry, so its no surprise that shares of The Andersons (ANDE) are trading near their 5-year lows. But what is kind of a surprise is the cluster buy that this diversified agricultural company recently enjoyed. Over the past few days, six insiders (and one of their spouses) bought shares of the company. Tracey thinks they see an opportunity at these lows, so she decided to get involved. Though the editor warns that this could be a very volatile position.

The portfolio also added Simply Good Foods (SMPL), a nutritional foods and snacking products company that owns the Atkins brand and plans to acquire Quest Nutrition. Shares of the company are down 25% from recent highs, but the CEO and a director see the recent pullback as a buying opportunity as they have both bought shares in recent days. Tracey added ANDE and SMPL with 10% allocations each on Thursday. Read the full write-up for a lot more on these moves.

Technology Innovators: What can be better than a chip stock that shows slow and steady strength? That’s the reason why Brian picked up FormFactor (FORM) on Thursday. This Zacks Rank #2 (Buy) is an OEM of automated wafer probe cards used in the back-end portion of the semiconductor manufacturing process. The company has beaten in each of the last four quarters and has amassed an average surprise of 11.4%. FORM is also enjoying rising earnings estimates and has a respectable valuation for a chip name. Read the full write up for more on this new buy.

Surprise Trader: "The strength and resilience of this market is really something to behold on a daily basis. News that just weeks ago would have buried it, is shaken off like water on a duck’s feathers. Stocks are Teflon right now, with no bad news sticking.

"A really strong market is bringing all-time highs to a host of stocks. While the breadth hasn’t been all that great, the moves of the broad market are still impressive. Buy the dip has been the name of the game here and as long as this thing keeps trucking along, it could stay that way for a very long time." -- Dave Bartosiak

Until Tomorrow,
Jim Giaquinto

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