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Late Rally Falls Just Short of Ending Losing Skid

Jim Giaquinto

Stocks rallied yet again to close out a Friday session, but it wasn’t enough to overcome a morning plunge amid a week’s worth of losses.

That’s not an exaggeration unfortunately… stocks closed in the red for five consecutive sessions. Now the NASDAQ’s 10-week winning streak is history and the Dow has back-to-back declines. The major indices each lost more than 2% this week, which can be considered a silver lining because it could’ve been a lot worse.

The big story today was that the economy added only 20,000 jobs last month, compared to expectations of somewhere around 180,000 to 200,000. We’ve gotten used to muscular jobs readings for a while now… but this was paltry by recent comparisons even though wage growth was on the rise.

The market eventually brushed the news off and branded it as a fluke like the retail sales data from December. However, you can bet that it will linger in investors’ minds for the time being as fears continue to mount of slowing growth overseas and here at home. Remember, this comes only one day after the ECB’s decision to cut its GDP forecast for the year.

The data pulled the major indices deep into the red at the open with the Dow declining more than 200 points at its worst. But the final hour or so saw an encouraging comeback that pared the index’s loss to only 0.09% (or about 23 points) by the close to 25,450.24.

The NASDAQ took the same trip and finished lower by only 0.18% to 7408.14. The S&P, which began the week above 2800 and was off by approximately 1% at one point today, declined by only 0.21% to 2743.07.

While it was a disappointing and frustrating week, it shouldn’t have been unexpected after the runup of January and February. Now that the market is no longer looking at things through rose-colored glasses, we’re going to need a catalyst or two to get moving in an upward direction again. Let’s hope we get something next week before the bears get too comfortable…

Today's Portfolio Highlights:

Insider Trader: The generic drug space looks like it may finally be turning the corner. Tracey believes that Lannett (LCI) gives the portfolio good exposure to the industry. Last month, the CEO and a director picked up shares just a few days after reporting earnings. But even more telling was that three directors bought back in December when shares fell under $5 amid the worst of the correction. The editor sees all of this as a buying opportunity, so she used the portfolio’s remaining cash to add LCI. It comes to an allocation of about 12%. Read the full write-up for a lot more on this new addition.

TAZR Trader: Shares of Roku (ROKU) have more than doubled this year and are up over 35% since this streaming platform reported quarterly top and bottom beats late last month. However, its dramatic growth rates are due to slow and EPS estimates took a big hit on company guidance. Most analysts only raised their price targets on the stock to an average of $62 due to its long road to profitability and rising platform competition in the streaming world. Kevin believes the stock will be headed back down soon, so he shorted ROKU on Friday with a 5% allocation. Read the full write-up for more.

Stocks Under $10: The “growthy” stocks aren’t living up to their name at the moment. Brian Bolan doesn’t feel as comfortable anymore with the riskier, “hot money plays”. Therefore, he sold Blink Charging (BLNK) on Friday for a 16.7% return in less than a month!

Have a Great Weekend,
Jim Giaquinto

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