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September Not As Tough As Feared

Jim Giaquinto

Even with all the ups and downs over the past several weeks (including trade shenanigans, inverting yield curves and now impeachment); the major indices were still in the green for September and mostly positive for the third quarter. 

Remember how we were all nervous heading into this month because of its reputation for being rough on stocks? 

Well, it certainly wasn’t an easy month for anybody, but the Dow still managed to gain nearly 2% in September. Meanwhile, the S&P was up about 1.7% and the NASDAQ improved around 0.5%. 

Except for the NASDAQ (which plunged 2.7% last month), September’s results pretty much offset August’s drop and helped the indices to respectable results for the whole third quarter. 

The Dow and S&P each climbed more than 1.2% in the quarter, while the NASDAQ was off only 0.01% despite all of its challenges. 

The month and the quarter finished up on Monday with a nice rally as Friday’s fears of the U.S. delisting Chinese companies was walked back by the White House. 

The NASDAQ came bouncing back with a rise of 0.75% (or nearly 60 points) to 7999.34. The S&P was up 0.50% to 2976.74 and the Dow increased 0.36% (or nearly 100 points) to 26,916.83.

Now we head toward the fourth quarter. If that sends a chill down your spine, you’re not alone. Last year’s fourth quarter was horrible, especially that Christmas Eve session. 

The editors aren’t expecting a replay in 2019. The fortunes for this new quarter will probably rest on a couple of big events coming in the next few weeks. 

We’ve got the big trade talks between the U.S. and China in less than two weeks. Investors are skeptical that a deal will be reached, but this headline-obsessed market could still get enough good news to help stocks move higher and perhaps reach new highs. 

And earnings season will begin at about the same time. Investors will get to see just how much trade and slowing global growth are impacting U.S. companies. 

Most likely these events will have a much greater impact than any ghosts of fourth quarters past! 

Today's Portfolio Highlights: 

Blockchain Innovators: The portfolio added two very different picks on Monday. Chipmaker NVIDIA (NVDA) is a rather obvious choice, especially since a new generation of GPUs will be a big catalyst for the future and help leave more recent problems behind. The other buy may not be as obvious. Waste Management (WM) is a garbage disposal business, but it’s exploring blockchain solutions to create more efficiency for its garbage truck fleet. Read the complete commentary for more on today’s moves.

Zacks Top 10 Stocks: The new update is live and it includes a change. Sheraz got out of the struggling Vocera (VCRA) pick and replaced it by adding AptarGroup (ATR). The new buy is a leading global supplier of a broad range of innovative dispensing systems for the beauty, personal care, home care, prescription drug, consumer health care, injectables, food and beverage markets. Read the full write-up for a lot more. 

Black Box Trader: It's a busy week for the portfolio as it swaps out seven names! The stocks leaving the portfolio are:

• Caleres (CAL, +6%)
• D.R. Horton (DHI, +5.8%)
• Crocs (CROX, +0.8%)
• OUTFRONT Media (OUT, +0.4%)
• CVS Health (CVS)
• DaVita (DVA)
• T-Mobile US (TMUS)

The new buys that replaced these positions are:  

• CenterPoint Energy (CNP)
• GMS Inc. (GMS)
• KB Home (KBH)
• Lowe's Cos. (LOW)
• National Oilwell Varco (NOV)
• Taylor Morrison Home Corp. (TMHC)
• Walmart (WMT)

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

Have a Great Evening,
Jim Giaquinto

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