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S&P: 3 Weeks of Gains and 3 Points from a New Closing High

Jim Giaquinto

The S&P finished just short of a new record on Friday, so we’ll have to settle for another solid week of earnings and gains for all the major indices.

For a moment there, the S&P did surpass its closing high of 3025.86 set back in late July. In the end, it finished higher by 0.41% to 3022.55, or a little more than 3 points away from history.

The leader of the day and the week, though, was the NASDAQ. Bolstered by a strong session for Intel, it jumped 0.70% (or 57 points) to 8243.12.

The tech-laden index now has a four-week winning streak, while the S&P has a three-week run. These indices have gained over the past three consecutive days as well.

And then there’s the Dow, which had to grapple with Boeing, 3M and the overall concern of softening global growth. The index still rose 0.57% (or around 150 points) to 26,958.06. And in what may be the most impressive result considering all the challenges, it advanced 0.7% for the week.  

Intel provided a nice lift for the market on Friday by soaring more than 8% after last night’s strong quarterly result, which included a better-than-expected fourth-quarter guidance.

And its worth noting that Amazon was only down a little more than 1% today, marking an impressive recovery from this morning in the wake of yesterday’s quarterly report that the market found disappointing.

We also enjoyed some good news on the trade situation, as the U.S. and China continue to talk and deliberate. They appear to be making progress in agreeing on the “phase one” of their deal. Fingers crossed…

A strong earnings season and some real progress on trade would be a great way to close out 2019 as we enter the final two months.

Wow… that was a busy week, but it was only an appetizer for what’s to come!

We’re still in the middle of earnings season so they’ll be plenty more reports coming, including the rest of the FAANGs. Alphabet is scheduled for Monday, while Apple and Facebook are coming on Wednesday.

But on top of all the earnings, next week also includes a Fed meeting. And guess what? The market is expecting another rate cut, which pretty much means it’s demanding one.

Fortunately, we have this weekend to relax and look forward (hopefully) to some new highs on the horizon…

Today's Portfolio Highlights:

Value Investor: The machinery industry has really been crushed by global recession fears. For example, industrial manufacturer Manitowoc (MTW) has lost 68% in the past 2 years! However, many analysts are coming around to the idea that the bottom has either been reached or is close. Tracey agrees, which is why she added MTW on Friday. In addition to its value characteristics, MTW is a Zacks Rank #2 (Buy) with earnings expected to climb to $1.70 this year from 64 cents. The last time this maker of cranes and hydraulic boom trucks was this low, it rallied hard after hitting bottom. The editor hopes she’s getting in just in time for the next uptrend. The stock reports again after the bell on Nov 7. Read the full write-up for more.

ETF Investor: What do you do if you’re bullish about the aerospace & defense industry amid this Boeing debacle? Well the first thing Neena did was sell the iShares U.S. Aerospace & Defense ETF (ITA) while she could still make a 6.5% return. This fund’s biggest holding is Boeing, which makes up about 21% of the portfolio. The editor replaced the name by adding SPDR S&P Aerospace & Defense ETF (XAR). The troubled airplane giant only makes up 3.8% of this fund! XAR has outperformed the S&P this year by gaining 34% and is slightly cheaper than what its replacing. Read the full write-up for more on today’s changes.

Healthcare Innovators: In one of those unpredictable things about earnings season, shares of Illumina (ILMN) plunged despite a strong quarterly report with better-than-expected earnings and sales. Apparently, the market is concerned about slowing growth and the UK possibly blocking an acquisition. Kevin sees the move as an overreaction and a great opportunity. He’s starting with a smaller position in ILMN because this life sciences company might continue slipping to around $250, which would be a good time to add more. So be patient and make sure to read his complete commentary for all the specifics.

Surprise Trader: With the semiconductor industry in the Top 30% of the Zacks Industry Rank, Dave ended this week’s buying spree by adding Silicon Motion Technology (SIMO) with a 12.5% allocation. This chip stock has met or beaten earnings for eight consecutive quarters, and seems set to do it again. It has an impressive Earnings ESP of 9.04% for the quarter coming after the bell on Tuesday, October 29. The editor also got out of the underperforming Hawaiian Holdings (HA) position. See the complete commentary for more.

Have a Great Weekend!
Jim Giaquinto

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