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Get Ready for a Slog

Jim Giaquinto

The market had a dull start to the week on Monday, and the editors believe this slog could continue for the next several days. We’re weeks away from the next round of economic data and the heart of earnings season. Perhaps President Trump will finally offer some specifics on his pro-growth agenda, or maybe Fed Chair Yellen will say something surprising in her comments on Thursday. But short of that, stocks may have to fight for green ground until a real catalyst presents itself.

Stocks wavered around breakeven the whole session and finished mixed. The S&P was off by 0.20% to 2373.5, while the Dow slipped by only 0.04% to 20,905.9. The NASDAQ managed a 0.01% advance to 5901.5.

But the editors won’t be taking it easy until that catalyst arrives. They continue to squeeze all they can out of this market while preparing for the next leg higher. Today, RTA bought a new position and added on to an existing one. Read about these buys and the swap in Black Box Trader in the highlights section below. But that’s not all. Zacks Counterstrike and Momentum Trader are also looking to make some moves this week, regardless of how quiet the market is.

Today's Portfolio Highlights:

Reitmeister Trading Alert: To investors obsessed with the Trump Trade, there is nothing exciting about an industry like office supplies. But Steve begs to differ. This space is actually in the top 1%(!) of the Zacks Industry Rank, and continues to be a consistent earnings performer at a discounted price. The editor got involved on Monday with a 6.7% allocation in ACCO Brands (ACCO), a Zacks Rank #2 that’s trading around $13.50 right now. However, Steve thinks this company could get to $18-$20 moving forward, especially as investors get back to looking for consistent earnings growth stories.

Meanwhile, the portfolio also used today’s slump in Foot Locker (FL) to add more shares and bring its allocation up to 7.3%. The editor thinks this approximately $74 stock could be worth $85 to $90 by the end of the year. Learn more about all of today’s moves in the complete RTA commentary.

Black Box Trader: The portfolio only had one swap in this week’s adjustment. It got out of CBG and replaced it by buying homebuilder D.R. Horton (DHI). Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Zacks Confidential: Contrary to popular belief, rising rates do not mean that you should stay away from the housing market. Brian Bolan still sees plenty of opportunity in the space, and Steve asked him to explain in this week’s Zacks Confidential. But he doesn’t think it’s time to buy the homebuilders. Instead, Brian offers three stock ideas from the homebuilding supply chain. Learn about these stocks and read his detailed article by clicking here.

Momentum Trader: "The week kicked off with relative mediocrity as the large caps chopped around breakeven for most of the session. We’re entering this relatively quiet period after a slew of economic reports and before earnings season kicks back into high year.

"For about the next month, I doubt we see too much in the way of activity either way for the market. That is, unless we get some meaningful tax reform or infrastructure spending from Capitol Hill." -- Dave Bartosiak

All the Best,
Jim Giaquinto


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