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Deal on the Way Now that Deadline is Delayed?

Jim Giaquinto

It's official! President Trump postponed the March 1 deadline for higher tariffs since trade negotiations with China have made enough "substantial progress". Though stocks came well off their highs from the morning, the major indices still finished the day in the green as stocks attempt a 10th straight week on positive ground.

The NASDAQ climbed 0.36% today to 7554.46, while the Dow stayed above 26,000 with a rise of 0.23% (or about 60 points) to 26,091.95. At its best point of the day though, the Dow had soared approximately 200 points. The S&P momentarily crossed over 2800, but couldn't hold onto the milestone and finished with a gain of 0.12% to 2796.11.

The past couple of weeks have been full of positive headlines from the meetings both in Beijing and in Washington. The President said last week that the deadline, which was rapidly approaching, was not set in stone. Today's delay is the most positive bit of news we've had thus far, but there's still no actual deal.

However, both sides seem to be working toward a summit between President Trump and President Xi of China sometime next month and possibly in Mr. Trump's Florida resort Mar-a-Lago. If everything goes as hoped, this could be the final step in an actual deal between the two countries that includes smiles, handshakes and, most importantly, signatures.

With stocks running out of steam as the day continued, many investors are worried that a deal has already been priced in. The market has been in an unusually good mood so far in 2019, stemming mainly from a more "patient" Fed and expectations for a trade deal. Who knows for sure? Maybe a good amount of this agreement has already been taken into account, but we still need this issue to move into the rear-view mirror if we hope to completely recover from the late 2018 correction and get back to new all-time highs.

Today's Portfolio Highlights:

Healthcare Innovators:
Swiss drugmaking giant Roche is getting deeper into gene therapy with its recent addition of Spark Therapeutics for $4.3 billion. That's more than twice the company's closing price from Friday! Investors think this is great news for portfolio position uniQure (QURE), which is also a gene therapy company working on treatments for the bleeding disorder hemophilia. Kevin thought that QURE could be a blockbuster in the making... and that means it could also be a prime takeover target. Shares soared 34.3% on Monday, which easily made it the best-performing stock among all the ZU portfolios. It is now the second-best performer in the portfolio with a jump of more than 64% since inception in July 2018.

By the way, the hot gene therapy space also gave the portfolio the second best performer of the day, as CRISPR Therapeutics (CRSP) jumped 25.2%. This name has been one of Kevin's favorites in recent years, and he added it again just a few days ago. Nice timing!

Surprise Trader: There's still enough of earnings season left for Dave to make a buy each day this week, but things are going to slow down afterward. For today, the editor added Live Nation Entertainment, Inc. (LYV) with a 12.5% allocation. The company is aptly named as its a live entertainment company that produces, markets and sells concerts. It's part of the Leisure & Recreation Services industry, which puts it in the top 16% of the Zacks Industry Rank. LYV has a positive Earnings ESP of 2.4% for the quarter being reported after the bell on Thursday, February 28%. Read the complete commentary for more on this new addition.

Home Run Investor: With more positive comments on a trade deal with China, Brian Bolan wants to put his sidelines cash to work. Therefore, he added Carbonite (CARB) on Monday, which is a Zacks Rank #1 (Strong Buy) that provides online backup solutions to retrieve files that are lost on the Internet. The stock sold off earlier this month after posting a guidance that was below expectations. But the editor feels the pullback was overdone, especially for a company that just made a good deal in acquiring Webroot. Plus, CARB has a good history of beating the Zacks Consensus Estimate and has amassed an average surprise of nearly 15% over the past four quarters. Read the full write-up for a lot more on this new addition, and be ready for another buy on Wednesday.


Black Box Trader: This week's adjustment included three swaps. The stocks that were sold are:

• Abercrombie & Fitch (ANF, +6.1%)
• Spirit AeroSystems (SPR, +2.2%)
• JetBlue Airways (JBLU)

The new buys that replaced these names are:

• Athene Holding (ATH)
• CBRE Group (CBRE)
• Newmark Group (NMRK)

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

All the Best,
Jim Giaquinto

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