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Market Serves Up More Records for Thanksgiving

Jim Giaquinto

This impressive holiday week continued on Thanksgiving eve as each of the major indices enjoyed new all-time highs… just as they did yesterday and the day before.

The NASDAQ jumped 0.66% (or about 57 points) to 8705.17, while the S&P rose 0.42% to 3153.63. The Dow started the session in negative territory but eventually finished higher by 0.15% (or around 42 points) to 28,164.

This marks the fourth straight day of gains for the indices and the third consecutive session with each of them reaching new highs.

That’s quite a difference from last year! You’ve probably blocked it out of your mind, but Thanksgiving week 2018 started with back-to-back selloffs. The Dow lost nearly 1,000 points on Monday and Tuesday and we were in the midst of a ‘tech wreck’.

The Wednesday before the holiday last year was mostly positive, but the indices nearly squandered a morning rally. And this all came after a horrible month of October.

Now here in 2019, the market is about to put together its third straight month in the green. (With Thanksgiving so late this year, Friday will be it for November.) And its also enjoying record highs!

And you know what the funniest thing is? We’re STILL waiting for some real progress on the trade front! Just as we were last year.

In fact, optimism over signing a Phase 1 trade deal is probably the biggest reason why we’re enjoying such a rollicking start to the holiday season.

It’s been the best of both worlds recently, with the market running higher on positive trade headlines while taking the negative ones in stride without any major selloffs. Fortunately, the recent headlines have been encouraging ones with both sides boasting of progress being made.

Along with hopes for a trade deal, we also enjoyed some positive economic data on Wednesday. Most importantly was that GDP for the third quarter was revised upward to 2.1%, compared to the previous reading of 1.9%.  

Investors don’t need a holiday to be thankful for the market of late. It should be easy to appreciate just how good things are right now, especially when compared to 2018.

What they DO need, however, is a strong holiday shopping season and a trade deal.

But let’s just be grateful for how far we’ve come and worry about that stuff when we get back to work.

Today's Portfolio Highlights:

Options Trader: With the weather getting colder everyday as we move toward winter, you can bet that Comfort Systems (FIX) will be busy. This Zacks Rank #1 (Strong Buy) is a national provider of comprehensive HVAC installation, maintenance, repair and replacement services. Kevin sees the stock in a bull pennant chart pattern, which projects an upside breakout. Therefore, he added a few bull call spreads on Wednesday by buying to open 4 March 50.00 Calls AND selling to open 4 March 55.00 Calls. If FIX gets to $55 or higher by the mid-March expiration, this move will make 122%. Meanwhile, the editor also bought to open 2 March 75.00 Puts in Pegasystems (PEGA), a Zacks Rank #4 (Sell) provider of CRM software. The stock is in a bearish head and shoulders pattern, which projects a downside breakout. Read the full write-up for a lot more on today’s moves.

Home Run Investor: ‘Tis the season to talk turkey… but this portfolio would rather talk about chicken! So who do you think has the best chicken sandwich: Popeyes or Chick-fil-A? Brian says NEITHER! He’s all about El Pollo Loco (LOCO), which isn’t in the discussion very much because of its size. However, the editor really does prefer their chicken and also appreciates the good earnings history that has made it a Zacks Rank #2 (Buy). The value is also pretty good. Now if LOCO could get some attention in this current chicken sandwich craze, Brian thinks its all set to take off. He also sold e.l.f. Beauty (ELF) today. See the complete commentary for more.

Surprise Trader: The bulk of earnings season may be over, but there are still enough reports coming out to make an addition to the portfolio. On Wednesday, Dave added Yext (YEXT), a Zacks Rank #1 (Strong Buy) provider of digital media technology services. It has a positive Earnings ESP of 5.56% for the report coming after the bell on Thursday, December 5. Sales estimates for the quarter suggest growth of 30% year over year. The editor also decided to sell the lethargic Ross Stores (ROST) for an approximately 3.3% return in a little over a week. Read the full write-up for more on today’s moves.

Value Investor: The portfolio didn’t have any pharma names… until today! Tracey added large-cap drug company AbbVie (ABBV) on Wednesday, which beat the Zacks Consensus Estimate in its most recent report and is expected to consistently grow earnings over the next two years. It also has a dividend yielding 4.8%. While drugs like Skyrizi and Rinvoq performed better than expected, the company’s pipeline could use some help. That’s why ABBV is in the middle of buying Allergan, which should close early next year. And don’t be surprised if its keeps acquiring moving forward. Despite a big rally off its recent lows, the editor still believes ABBV is attractively priced. Take a look at the complete commentary for more on this new buy.

Happy Thanksgiving!
Jim Giaquinto

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