Stocks Slide for Third Straight Day

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Well, we’re really stuck. The major indices have closed lower for three consecutive days as the market just can’t seem to find any reason to move higher.

The NASDAQ had been outperforming its counterparts earlier in the week, but today it led the way lower with a slide of 0.93% (or about 70 points) to 7505.92.

The S&P was above 2800 as recently as last Friday. Since then though, the index has been retreating from that mark. It was down 0.65% in the session to 2771,45.

The Dow slipped another 0.52% (or around 133 points) to 25,673.46.

Fortunately, we’re not having a severe selloff at the moment… even though it sometimes feels that way. Stocks are only down by approximately 1% during this losing skid, which means they’re still up double digits year to date.

The first two months of 2019 were so easy, as the market was feeling good on trade deal optimism and the “patient” Fed. But its not so simple anymore.

Investors are getting concerned about slowing growth, while a trade deal remains up in the air despite a number of positive headlines over the past few weeks. But the biggest worry right now is that a trade agreement has already been priced into the market, which means that an official deal may not have much of an impact.

But there’s still enough time this week to keep the market moving higher. Remember, the NASDAQ is on a 10-week winning streak while the S&P and Dow have each advanced in 9 of the past 10 weeks.

We need a catalyst! The meeting between President Trump and China President Xi won’t happen until the end of this month at the earliest, but another piece of encouraging trade news would always be welcome. Plus, everyone is watching for the big jobs report on Friday.

Today's Portfolio Highlights:

Counterstrike: With the market sputtering and more downside possible, Jeremy decided this was a good time to short a couple of names. 58.com Inc. (WUBA) missed earnings by 20% last week, sending shares of this Chinese online marketplace lower by about 15%. Meanwhile, Stamps.com Inc. (STMP) had a “disastrous” earnings report after this Internet-based postage company lost its deal with USPS. The editor believes both of these names have further to fall, so he shorted each with a 5% allocation. Read the full write-up for more on these moves and to look at their charts.

Insider Trader: The portfolio added Diebold (DBD) and Zimmer Biomet (ZBH) on Wednesday with 10% allocations for each. These companies are both up so far in 2019, but that didn’t keep insiders from buying shares in recent days. Tracey thinks this could be a signal that these stocks have further to climb. DBD provides connected commerce solutions to financial institutions, while ZBH is a large-cap medical device maker. Read the full write-up for specifics on these new buys. By the way, the editor also sold the rest of Live Oaks (LOB) for a more than 9% return in a little over a month.

Home Run Investor: The market is slowing down a bit as we are still waiting for a trade deal. Brian Bolan doesn’t know how long this malaise will last, so he wants more diversification in the portfolio to prepare for any outcome. On Wednesday, the editor added Resources Connection (RECN), which is a management consulting firm with several thousand clients. Therefore, it has a pretty reliable and visible revenue stream. The stock has a good valuation and earnings estimates that have improved over the past 90 days. Read the complete commentary for more on this new pick and be ready for another buy tomorrow.

Healthcare Innovators: The JPM Healthcare Conference in early January was a nice turning point for Neurocrine Biosciences (NBIX), as shares bounced off support at $68 and are now at around $74. Kevin thinks the risk/reward is very favorable at the moment for such an innovative nervous systems company, which has a lucrative partnership with AbbVie that bodes well for the future. Read the complete commentary for specifics on this new addition.

All the Best,
Jim Giaquinto

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