Another Week of Gains with New Highs Despite Tariff Uncertainty

The major indices fought past a negative trade headline this morning and finished Friday with positive performances for the session and the week.

The NASDAQ advanced 0.48% (or nearly 41 points) to 8475.31, while the S&P rose 0.26% to 3093.08.

The Dow spent the entire day in negative territory before sliding into the green in the final moments. It ended with a slight gain of 0.02% (or a little more than 6 points) to 27,681.24.

All of the indices go into the weekend with fresh closing highs. But more impressively, they each continued weekly winning streaks.

The NASDAQ was up 1% over the past 5 days, which marks its SIXTH straight week of gains. The S&P is right behind with FIVE weeks of green after rising 0.9%.

And now even the Dow has itself a winning run. The index had the best performance with an advance of 1.2%, which marked a third straight positive week.

The market’s big challenge on Friday came from President Trump, who stated that he hasn’t agreed to roll back tariffs on China yet. Stocks reacted negatively to the news in the morning.

The remark threw cold water on yesterday’s big catalyst that suggested the two sides were open to removing existing tariffs in phases as progress is made.  

But perhaps headlines aren’t having the same punch that they once did. We all remember days when a positive week was completely ruined on Friday after negative trade news.

But not this time! The major indices slowly but surely recovered throughout the course of the day.

We’ve had a lot of trade news lately, some of it was positive and some was more frustrating. However, as far as we know, a Phase 1 deal has NOT fallen through and could still happen before the year is out.

Along with the better-than-expected earnings season, that’s more than enough reason for the market to stay positive as we move toward the holidays.

Today's Portfolio Highlights:

Options Trader: The portfolio made a couple moves to close out the week, including buying to open 2 Feb. 80.00 Calls in agricultural equipment company AGCO (AGCO). The company reported a positive surprise of more than 5% last week, and now its just broken out of a bullish head and shoulders “failure” pattern (which is bullish). Kevin has a price target of $91 on AGCO.

The editor also added a few bull call spreads in DICK'S Sporting Goods (DKS) by buying to open 4 March 41.00 Calls AND selling to open 4 March 46.00 Calls. The company will report on November 26th. Last time, it beat earnings and revenue expectations by 4.13% and 2.62%, respectively. It also raised its guidance. If DKS gets to $46 by the mid-March expiration, the portfolio will make 156%. Read the full write-up for more on today’s moves.

Blockchain Innovators: After a strong earnings report last quarter, Dave thinks that Lending Club (LC) may finally be ready to get through resistance at its 200-day moving average. That’s “rare territory” for this Zacks Rank #2 (Buy) provider of Internet financial services, but a positive surprise of 800% and better-than-expected revenue may finally get the job done. The editor added LC on Friday and decided to remove the stalled Fastly (FSLY). Read the complete commentary for more.

Surprise Trader: With Thanksgiving right around the corner, it’s fitting for this portfolio to add a 12.5% allocation in Grocery Outlet (GO). This Zacks Rank #2 (Buy) owns and operates a chain of grocery stores and it is scheduled to report after the bell on Monday, November 11th. The stock has a positive Earnings ESP of 2.7% for the report. In order to make room, the editor decided to sell Silicon Motion (SIMO) for an 8% return in two weeks. Read the full write-up for more.

Top 10 Stocks: Shares of Ubiquiti (UI) soared nearly 36% on Friday after the computer networking company reported strong first-quarter results. Earnings per share of $1.44 beat the Zacks Consensus Estimate by 12.5%, while revenues of $323.3 million topped our expectations by 8.3%. UI was easily the best performing stock of the day among all ZU portfolios. It has also soared 78.1% since being added in January, which makes it the service's second-biggest winner.

Have a Great Weekend!
Jim Giaquinto

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