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Stocks Cruise to an 8th Straight Week of Gains

Jim Giaquinto

Stocks easily achieved their 8th straight week in the green on Friday, as the market continues to move higher on good vibes for trade negotiations with China.

Each of the major indices already had 1% gains heading into today’s session… and two of them managed to add another 1%, and then some, by the closing bell.

The Dow soared 1.74% (or nearly 444 points) on Friday to 25,883.25, while the S&P increased 1.09% to 2775.60. The NASDAQ lagged its counterparts as the FAANGs didn’t participate in the rally, but the index still advanced 0.61% to 7472.41.

Unlike the last couple of days, stocks moved even higher in the final hour of trading.

The Dow and the NASDAQ now have 8-week winning streaks after gains of more than 3% and 2.4%, respectively, over the last 5 days. In other words, they haven’t had a losing week so far in 2019 after hitting bottom on Christmas Eve.

The S&P jumped 2.5%, marking its third straight week in the green and its 7th in the past 8.   

On the trade front, we already knew that Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer were negotiating in China this week and that President Trump is willing to extend the early March deadline that would bring higher tariffs.

While there are still no breakthroughs, the market liked hearing that trade talks would resume next week in Washington. There’s not going to be a deal unless the two sides continue communicating, so our positive sentiment remains intact for now in hopes that an agreement can be made sooner rather than later… perhaps even before the March deadline.  

In other deal news, we won’t have a sequel to the longest government shutdown in history, as President Trump signed the spending agreement worked out in Congress. He also declared a national emergency to get the funds for a border wall. This will set off a lot of legal drama in Washington, but the market is just thrilled that the government’s doors will remain open.

Today's Portfolio Highlights:

Stocks Under $10: The market continues to rise and this portfolio is almost completely in the green, so Brian Bolan is feeling a bit riskier than normal. On Friday, he picked up Blink Charging (BLNK), a small owner, operator and provider of EV charging stations and services. The stock has been “off to the races” since bottoming out under $2 a few weeks ago, and the editor believes it could be on the verge of a breakout if the hot money returns. Read the full write-up for more on this new pick. The addition of BLNK brings the service up to 13 names, which means there’s still two spots open to get to the ideal complement of 15 positions. Be ready for at least one more next week.

Home Run Investor: In another “risk on” move, Brian Bolan picked up Materialise (MTLS) on Friday. The Zacks Rank #2 (Buy) makes software for the 3D printing space and other engineering software for the biomedical sector. Software is pretty hot right now, but this name is on the smaller side and doesn’t have the market’s attention at the moment. However, the editor thinks there’s a good chance that the hot money players will eventually get around to MTLS… and then the stock will be all set to round the bases. Read the full write-up for more.

TAZR Trader: In the wake of yesterday’s surprisingly weak retail sales data, Kevin thought it was a good time to short a retailer that has a “setup for disappointment”. Dillards (DDS) reports on February 26, and it has a negative Earnings ESP of 2.7% to go along with an earnings growth forecast for a 6% decline. With the stock hanging around $70, the editor shorted it with a 5% allocation. He also added to the Direxion Daily Small Cap Bear 3X Shares (TZA) position. Get specifics on these moves in the full write-up.

Counterstrike: "A plethora of positive headlines came from China as the trade talks have accelerated and will continue in Washington DC next week. According to both sides, China and the US are to issue a memorandum of understanding by the end of the day after this week talks.

"This mean we have a deal in the works, with the details to be ironed out. This is exactly what the market wanted to hear and the bulls were buying all day.

"You would think a bigger day might come, but we have to understand that a lot of this deal has been priced in over the last couple week. If we get an official deal, I would expect another round of buying."
-- Jeremy Mullin.

Have a Great Three-Day Weekend!
Jim Giaquinto

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