We've had a great start to the year with the major indices putting together another strong month in February. The Dow and NASDAQ each advanced about 3.5% while the S&P increased 3%. They are all up double-digits in 2019. Who would've thought that on Christmas Eve?
More recently though, we've seen a bit of sluggishness sneak into the market as euphoria subsides over the more patient Fed and a possible trade deal. Also, earnings season has been better than what many feared, but growth is still down from previous quarters (as expected). As a result, the Dow and S&P have both slipped over the past three consecutive days.
The GDP results today fit right in with the overall feeling of the market at the moment. The economy grew at an annualized rate of 2.6% in the fourth quarter, which was better than expectations of somewhere around 2%-2.2%. But it's less than the GDPs of previous quarters. In other words: it's still good, but not as good as before.
The GDP for the full year barely missed 3% at 2.9%.
So now we're left with a pretty dull market looking for the next catalyst to send us higher. The session on Thursday was another tight trading range that ended with slight losses for the indices. The NASDAQ dipped 0.29% to 7532.53, while the S&P slipped 0.28% to 2784.49. The Dow was off 0.27% to 25,916.
A trade deal with China would certainly help investors break out of the malaise. A different potential deal ended on Thursday when President Trump left his meeting with Kim Jong-un of North Korea earlier than expected without a denuclearization agreement. But that wasn't the meeting everyone is waiting for. We want to see our President and President Xi of China put this trade conflict to rest sometime next month. Hopefully, there won't be any walk outs at that get-together.
So where does that leave the market and its 9-week winning streak heading into Friday's session? We're pretty much at the exact same point as last week. The major indices are all down over the past four days, but only by a little bit. A solid Friday close would get us back into the green and push this rally to 10 straight weeks. Can the market overcome its recent doldrums and keep the momentum going? We'll soon find out...
Today's Portfolio Highlights:
Stocks Under $10: The double-digit plunge in Fitbit after a soft guidance has Brian Bolan a little skittish about his GoPro (GPRO) position, since both are wearable accessories companies. And it doesn't help his mood that GPRO was down today as well. The editor decided this was a good opportunity to sell the stock for a 29% profit in less than two months.
Counterstrike: The algos made a big mistake when they sold off BioTelemetry (BEAT) after its quarterly report, which included only a "slight" revenue beat to go along with its earnings surprise. Shares of this ambulatory outpatient management solutions company have since bounced off major support, reclaimed its 50-day moving average and are now in full-fledged rally mode. Jeremy wants to join this bullish momentum, so he added BEAT on Thursday. He also sold half of RH (RH) for a 25.3% return just in case there are any "hiccups" in the trade negotiations with China. Read the full write-up for more on today's moves.
Healthcare Innovators: The portfolio is returning to Inogen (INGN), which makes portable oxygen concentrators and was a 40%+ winner for the service back in 2017. Kevin appreciates this company's ability to outperform its industry with solid year-over-year growth, as well as its expanding product portfolio. However, the editor warns of some "special risks" with INGN, namely that a couple of firms have been shorting the innovator. Read the full write-up for a lot more on the challenges and potential of this new pick.
Blockchain Innovators: The security division at Rambus (RMBS) has "dived head-first into blockchain technology". As such blockchain-based payments gain more popularity, Dave believes that demand for this type of product offering is likely to surge. Therefore, the editor decided to dive into RMBS on Thursday. Read the full write-up for more.
All the Best,
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