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Second Straight Monday With a 1% Advance

Jim Giaquinto

Feeling a little déjà vu?

You should be!

This was the second straight Monday with stocks gaining 1% in hopes of breaking a weekly losing streak.

The NASDAQ jumped 1.32% (or nearly 102 points) to 7853.74 and the S&P rose 1.1% to 2878.38. The Dow advanced 1.05% (or nearly 270 points) to 25,898.83.

These indices each dropped by more than 2% on Friday, spoiling a chance to break their losing streaks. Stocks went into that session with gains of approximately 1% through Thursday, but finished the week with losses of over 1% thanks to the late selloff.

Positive comments on trade from President Trump prompted today’s rally. He said the U.S. and China would be getting back to the negotiating table, though China denied such a call took place.

But it didn’t matter. It was the headline that counted, as has been the case with this market for a while now. Stocks liked what they heard and so they took off to reclaim part of last Friday’s deficit.

It was as simple as that.

Just like headlines change from day to day, so can the President’s tone. On Friday, he was irate after China put new tariffs on U.S. goods; so irate, in fact, that he ordered U.S. companies to stop doing business with China in a series of tweets.

And then after the bell on Friday, he increased tariff rates on Chinese imports.

Hopefully, that was enough tit-for-tat to tide the two sides over for a while. Because this market will continue taking its cue from news reports and Presidential tweets until something real happens.

That’s especially true this week, as we move toward a three-day weekend with earnings season done and economic data rather light until next week’s turn-of-the-month deluge.

Let’s see if we can get through the rest of this week without any more drama, because it feels like stocks are willing to rise if things can calm down a bit.

Today's Portfolio Highlights:

Technology Innovators: Now that UpWork (UPWK) is near its 52-week lows, Brian sees a fantastic opportunity for a classic “buy low, sell high” trade on a stock he’s been watching for a while. UPWK is a Zacks Rank #2 (Buy) provider of online recruitment services that jumped after a strong quarterly report earlier this month, but the trade war impact took a toll on the stock. The editor saw a great entry point to buy a company that has beaten the Zacks Consensus Estimate in three of the last four quarters. Analysts still expect losses for this year and next, but those losses have been narrowing in the past several weeks. With margins headed higher, Brian thinks UPWK is set for profitability in the next year or so. Read the full write-up for more.

Insider Trader: Shares of Mosaic (MOS) have plunged to 5-year lows and are down more than 26% in the last month alone, as fertilizers remains a “hated” industry. Tracey thinks the sell-off is absurd… and so does one of the company’s directors, who bought nearly 13,000 shares last week at $19.21. The editor can’t be certain that fertilizer stocks won’t move lower, of course, but she likes that Wall Street is paying no attention to this space right now. That’s usually when they find a bottom! Still, Tracey is going to be cautious and buy MOS with a smaller, 5% allocation. Read the full write-up for more and be ready for additional buys this week as the portfolio still has plenty of cash.

Black Box Trader: Half of the portfolio was changed in this week's adjustment. The stocks that were sold included:

• Wesco Aircraft Holdings (WAIR)
• Walmart (WMT)
• Arconic (ARNC)
• Commerical Metals Co. (CMC)
• JetBlue Airways Corp. (JBLU)

The new buys that replaced these names are:

• CBRE Group (CBRE)
• Fossil Group (FOSL)
• Pilgrim's Pride (PPC)
• Rent-A-Center (RCII)
• Target (TGT)

Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Until Tomorrow,
Jim Giaquinto

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