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More New Records for Dow, NASDAQ Despite a Slower Rally

Jim Giaquinto

The November episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this “must-see” event when Kevin Matras, Kevin Cook, Ben Rains, Madeleine Johnson and Sheraz Mian discuss the investment landscape from several angles.

Don’t miss your chance to hear:

• Ben and Madeleine Agree to Disagree on the Streaming Wars and whether Netflix will be affected by new competition from Apple TV+, Disney+ and more
• Kevin Matras covers if investors should get in with stocks making new all-time highs or wait for a pullback in Zacks Mailbag
• Sheraz and Kevin Cook choose one portfolio to give feedback for improvement
• And much more

Simply log on to Zacks.com and view the November episode here. And please let us know what you think of this format. Email all feedback to mailbag@zacks.com.


After all the major indices hit new highs in the same session yesterday (for the first time since mid-July), it’s understandable to see some hesitation the next day.

However, even though stocks came well off their highs and moved mostly lower in the final hours, two indices managed to hang on for another day of fresh records.

All they had to do was finish on the plus side!

The Dow rose by 0.11% (or about 30 points) to 27,492.63, while the NASDAQ inched upward by 0.02% (or around one-and-a-half points) to 8434.68.

The S&P, which had reached new highs in four of the previous six sessions, had a chance to join its counterparts in the green. However, it fell short by 0.12% and finished at 3074.62.

The market continues to be in a great mood after a bevy of good news, especially the better-than-expected earnings season and optimism that Phase 1 of the trade deal could be on the horizon.

And just today we got a solid reading from the ISM non-manufacturing index, which came to 54.7 in October (anything over 50 is expansion).

That’s a nice bounce from a three-year low in September. The result was more than 2 points better than the previous month and more than 1 point better than the consensus.

The services sector makes up two-thirds of our economy, so this was a nice counterpoint to the ISM manufacturing index and its three straight months of contraction (sub 50 readings).

The other big number recently was the jobs report on Friday, which said the economy added a more-than-expected 128,000 jobs last month with upward revisions for the previous two months.

How much longer can this last? Well, earnings season will be over soon and, just as before, good feelings about a trade deal will only last so long. Plus, a bad headline could really wreak some havoc.

So let’s enjoy this in the moment and hope there’s more good news on the way to finish out the year!

Today's Portfolio Highlights:

Stocks Under $10: With shipping rates continuing to move higher and Frontline (FRO) jumping more than 21% since being added two months ago, Brian decided to add another name from this industry. On Tuesday, he bought Diana Shipping (DSX), a Zacks Rank #2 (Buy) that specializes in transporting dry bulk cargoes, including iron ore, coal and grain. If we do get an agreement on Phase 1 of a trade deal, than this would be a good place to be. Read the full write-up for more.

Surprise Trader: The transportation – shipping industry is in the top 13% of the Zacks Industry Rank, so Dave is getting involved by adding a 12.5% allocation in Seaspan (SSW). This Zacks Rank #2 (Buy) owns containerships and charters them pursuant to long-term fixed-rate charters. SSW surprised by more than 21% last time, and has an impressive Earnings ESP of more than 29% for the report scheduled before the bell on Thursday, November 7. The editor also sold Agnico Eagle Mines (AEM) on Tuesday for a return of 11.2% in a little over two weeks. Read the complete commentary for more on all of today’s moves.

Technology Innovators: This portfolio easily had the best performer of the day, as EverQuote (EVER) soared 24.6% after a solid quarterly report. This online marketplace for insurance shopping beat the Zacks Consensus Estimate by an impressive 250%, while the bottom line beat our expectation by more than 15%. EVER is now the second-best performer in the portfolio with a gain of nearly 40% in just a little over a month!

Zacks Short List:
The portfolio cashed in two double-digit winners as part of its weekly adjustment, which included six swaps in all. The stocks that left the service after being short-covered include:

• Grubhub (GRUB, +37.7%)
• GoDaddy (GDDY, +17%)
• Gardner Denver (GDI)
• QUALCOMM (QCOM)
• PTC Inc. (PTC)
• Palo Alto Networks (PANW)

The new buys that replaced these names are:

• Cheniere Energy (LNG)
• Eldorado Resorts (ERI)
• InterXion Holding N.V. (INXN)
• Live Nation Entertainment (LYV)
• Weyerhaeuser Co. (WY)
• World Wrestling Entertainment (WWE)

Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Have a Great Evening,
Jim Giaquinto

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