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Relieved Stocks Resume Rally and Lift NASDAQ to New Record

Jim Giaquinto

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Since we’re more than halfway through the week and still not at war with Iran, the market decided this was a good day to get back to rallying.

Last night, we were all holding our breath after reports of Iran striking military bases in Iraq that included American soldiers. The market has been waiting for some kind of retaliation after this past weekend’s airstrike that killed Iran’s top military commander.

However, this morning we woke up to news that there were no casualties in the missile attacks and that Iran appeared to be “standing down”, according to President Trump.

The major indices had been idling before POTUS’ comments, and then moved sharply higher.

The Dow jumped 0.56% (or about 161 points) to 28,745.09. The index had been north of 280 points at its height of the session, but the momentum waned in the final hour. Nevertheless, it’s still a vast improvement over the more than 400-point loss in the futures overnight.

The S&P hit a new intraday high and seemed poised to close at a record, but it too got caught up in the late swoon. It still rose 0.49% to 3253.05.

But the good old NASDAQ held on enough to finish at an all-time closing high by advancing 0.67% (or around 60 points) to 9129.24.

Let’s not get ahead of ourselves, though. The U.S. relationship with Iran will remain tense (as it has for the last 40 years or so). We’ll be susceptible to any kind of headline out of the region, such as rumors of explosions in Baghdad today that probably led to the late pullback.

However, fears of an imminent war between the two countries appear to be exaggerated at the moment.

Meanwhile, lost in the shuffle on Wednesday was a strong ADP employment report. Companies added 202,000 jobs last month, which was well above expectations.

Friday brings the Government Employment Situation report.

Let’s hope this strife with Iran can continue to simmer down. Investors would much rather focus on the signing of Phase 1, the upcoming earnings season, this strong economy and this epic bull run in the market.

Today's Portfolio Highlights:

Home Run Investor:
It was great news to hear that last night’s airstrikes didn’t kill anyone and that there was no escalation during the day. But, unfortunately, we haven’t heard the last of violence in that part of the world. Therefore, Brian feels comfortable in continuing to add names from the defense space. On Wednesday, he picked up Aerojet Rocketdyne (AJRD), a Zacks Rank #2 (Buy) technology-based engineering & manufacturing company that produces specialized propulsion systems and armament systems. This addition fills up the portfolio with 15 names, so any further buying would also include some selling. And it just so happens the editor may be making some moves on Friday. Read the full write-up for more on today’s addition.

TAZR Trader: Back in January 2018, Kevin warned his subscribers that the market was due for a pullback as the NASDAQ 100 (QQQ) traded 7% above its 50-day. He was a couple weeks early, but that’s exactly what happened. Well, the editor is getting a bit of déjà vu with QQQ now 5.8% over the 50-day. The plan on Wednesday was to raise some cash ahead of the upcoming plunge. The portfolio sold all of its The Trade Desk (TTD) and half of its Alteryx (AYX) positions for gains of 51.7% and 23.8%, respectively. Proofpoint (PFPT) was also sold for a 5% profit, along with half of the remaining Elastic (ESTC) position for a slight 0.2% advance. Make sure to read the complete commentary for more specifics on Kevin's moves today.

All the Best,
Jim Giaquinto

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