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Strong Jobs Data Ends Short but Crazy Week

Jim Giaquinto

After a week full of concerns about Italian politics and tariffs, it was fun to end things with another great jobs report. In fact, you could consider this a second straight “goldilocks” reading.

The economy added 223,000 jobs last month, which was ahead of expectations at about 190,000. The unemployment rate fell even further to 3.8% while wage growth was tame. It was a little better than the previous month (which was actually below expectations), but not so strong as to immediately get investors concerned about an extra rate hike this year.

The biggest winner of the day and week was the NASDAQ, which jumped 1.51% to 7554.3 on Friday. It was up 1.6% for the week. The S&P climbed 1.08% today to 2734.6 and the Dow jumped 0.90% to 24,635.2. The former index climbed about 0.5% during the week, but the latter closed the past four days in negative territory.

“It was a week of back-and-forth for the market. Some jitters early on and a nervous Thursday but at the end of the day I like how the market is positioned moving forward. Not too worried about trade wars yet as it seems to be mostly posturing,” said Dave Bartosiak, editor of Blockchain Innovators, Momentum Trader and Surprise Trader.

Meanwhile, the summit with North Korea is back on! And it will still be in Singapore on June 12! President Trump hosted a key official from the country on Friday who carried a letter from North Korean leader Kim Jong Un expressing interest in getting together later this month. The President warned that this will likely be the start of a “process” with the ultimate goal being denuclearization.

The news finished off a short week that was heavy with geopolitical concerns. Earlier, political turmoil in Italy took a bite out the market, but a coalition government has since been formed in that country that should avert a new round of elections. And then the big news yesterday was steel and aluminum tariffs on U.S. allies Canada, Mexico and the EU. There’s been no resolution to that issue yet, but at least there was nothing to exacerbate them on Friday.

It was a busy day of activity in the portfolios, so let’s just get right to the moves and end this crazy week...

Today's Portfolio Highlights:


Blockchain Innovators: At the end of last year, Riot Blockchain (RIOT) was a highly speculative name. But these days, it has analyst coverage and is part of the Zacks Rank, which Dave sees as another sign of the legitimization of the blockchain. RIOT is a pure blockchain play and in a recent Annual Report Form 10-K stated: “We continue to focus on the expansion of our cryptocurrency mining operations and the active investigation of launching a cryptocurrency exchange in the United States.” Learn more about this new addition in the full write-up.

Insider Trader: The small caps are finally outperforming, so Tracey added three small- and mid-cap companies on Friday to gain more exposure. Here are the moves:

• Sohu.com (SOHU): The CEO of this Chinese online media company bought numerous times between April 30 and May 30 in what the editor calls a “confidence buy” as shares were down 30% year-to-date at the time.

• Cars.com (CARS) operates a digital marketplace for the auto industry and was spun off from a larger corporate parent last June. The stock is down about 10% so far this year, but the CEO and the Chairman of the Board both recently picked up shares.

• Myers Industries (MYE): This plastics manufacturer saw a cluster buy as three directors bought in late May. This volatile name has dropped nearly 15% in the last month but reported a solid first quarter and is expected to grow earnings 66% in 2018.

Tracey will split the cash equally between these three names, leaving allocations of approximately 8% each. The portfolio is now fully invested. Read the full write-up for a lot more on these picks.

Technology Innovators: This rising market has Brian Bolan wanting to take some profits in the portfolio. Apptio (APTI) is a software company that was added on the last day of 2017 in hopes of a breakout. Well, the plan came together and the stock was sold today for a gain of approximately 40%. Meanwhile, VMware (VMW) was one of the service’s inaugural picks back in October. Shares jumped this morning and Brian wanted to take a profit of more than 26% before it gave too much back. He’ll add a new name on Tuesday.

ETF Investor: After soaring earlier this month and then dropping this week, many analysts think the supply-demand in the oil market is now balanced with positive fundamentals. Neena wants to use the recent dip to gain some energy exposure, so she picked up SPDR S&P Oil & Gas Exploration & Production ETF (XOP). This fund is equal-weighted and holds all asset classes but has more leverage to a rise in oil prices due to significant exposure to smaller players. Read the complete commentary for more.

Counterstrike: The market has responded well to negative news this week, which has Jeremy thinking that stocks could break higher soon. To get the portfolio fully invested, the editor made the following three moves on Friday:

• Added 5% to Baidu (BIDU), the so-called “Google of China” that was first bought on May 18. The stock is on a solid move today and could make it to $300.

• Added 6% to Caterpillar (CAT), which was first picked up in late April and then added to in early May. Jeremy thinks the 50-day will hold and the stock will make its way past $160 and into the $170s.

• Added 4% to Salesforce (CRM), the on-demand business services company that is in the midst of a “ridiculous” selloff that should get cleared up next week.

Read the complete commentary for a lot more on all these moves.

Momentum Trader: Shares of Natural Grocers (NGVC) have retraced a bit after surging well past $11 in the wake of its most recent earnings report, which included a positive surprise of 36%. Dave is hoping that its current level marks “a launchpad for the next leg higher” in this specialty retailer of natural and organic groceries and dietary supplements. The editor added this Zacks Rank #2 (Buy) on Friday with a 12.5% allocation. See the full write-up for more.

Have a Great Weekend,
Jim Giaquinto

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