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Tech Snaps Market Out of Slump

Jim Giaquinto

Remember, the latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, March 13. Kevin Matras, Tracey Ryniec, Jeremy Mullin and Neena Mishra, CFA, FRM, will cover the investment landscape from several angles in this informative event.

Don’t miss your chance to hear:

• Tracey and Neena Agree to Disagree on cryptocurrencies: is it time to in-vest now that they’ve come back down to earth or were they just a fad that’s now over?
• Kevin answers your questions in Zacks Mailbag
• Jeremy and Neena choose one portfolio to give feedback for improvement
• And much more

So be sure to mark your calendar then log on to Zacks.com and bookmark this page.

What a great way to start the week! Stocks kicked things off on Monday by breaking its 5-day losing streak with a solid, tech-led rally.

The NASDAQ recovered nearly all of last week’s pullback that ended its impressive 10-week winning streak. The index jumped 2.02% (or nearly 150 points) today to 7558.06. The S&P took a big step towards regaining 2800 with a rise of 1.47% to 2783.30.

These indices got a huge assist from tech, especially the nearly 3.5% advance in Apple after it was upgraded by Bank of America. The FAANGs were out in force today with other noteworthy advances from Amazon (+3.07%), Alphabet (+2.93%), Netflix (+2.65%) and Facebook (+1.46%).

The Dow’s advance was limited by Boeing, which slid more than 5% after the second crash in less than six months for its 737 Max 8 jet model. Nevertheless, the index still had a positive, streak-breaking performance with a gain of 0.79% (or 200 points) to 25,650.88.

Not only was this the first green in days for the market, but the major indices closed near their highs.

Another positive for the session was retail sales, which climbed 0.2% in January and beat expectations. This reading will make investors feel somewhat better after the extremely sharp decline in December, which should be noted was revised even lower to 1.6% from 1.2%. We’re all concerned about slowing growth these days, but this report suggests that the December result could have been a one-off given the sharp correction and government shutdown.

Let’s see if there’s some follow-through the rest of this week. No date has been set yet for the face-to-face meeting between President Trump and China President Xi, so we probably won’t get any trade breakthroughs in the coming days. But some good headlines (or, at least, lack of bad ones) wouldn’t hurt. We’ll also be watching out for any other economic reports from here in the U.S. or abroad.

Today's Portfolio Highlights:

Blockchain Innovators: The portfolio added a couple big names on Monday: Facebook (FB) and Delta Airlines (DAL). The social media giant has been aggressively hiring engineers with blockchain experience, while the airline is using blockchain to track their cargo shipments. These are two of three additions that Dave has planned for this week. Read the full write-up for more.

Healthcare Innovators: The two new buys for this week are DexCom (DXCM) and Veeva Systems (VEEV), which are both Zacks Rank #2s (Buys) coming off of solid quarterly reports. DXCM’s continuous glucose monitor (CGM) is designed to track glucose levels throughout the day, rather than making diabetes sufferers prick their fingers several times a day. VEEV provides cloud-based software solutions to the life sciences industry, which satisfies Kevin’s desire for a SaaS innovator that’s focused on that space. The full write-up has a lot more on these new additions, including a “deep dive” on DXCM.

Technology Innovators: After cashing in a couple gains last week, the portfolio has some spots to fill. Therefore, Brian Bolan added Perficient (PRFT), a leading digital transformation consulting firm. The company is a Zacks Rank #1 (Strong Buy), which saw its earnings estimates rise after beating expectations in its most recent quarter. In fact, PRFT has a solid earnings history and is part of a space (Computer – Services) in the top 11% of the Zacks Industry Rank. Read the complete commentary for a lot more on this new addition.

Black Box Trader: More than half of the portfolio was changed in this week's adjustment. The six names that were sold included:

• Synchrony Financial (SYF, +5.9%)
• Live Nation Entertainment (LYV, +2.4%)
• Booz Allen Hamilton (BAH, +1.9%)
• Charter Communications (CHTR)
• Spirit AeroSystems (SPR)
• Boeing (BA)

The new buys that filled these spots are:

• Rent-A-Center (RCII)
• Costco Wholesale (COST)
• Anthem (ANTM)
• Tronox Ltd. (TROX)
• CBRE Group (CBRE)
• Hertz Global Holdings (HTZ)

Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Until Tomorrow,
Jim Giaquinto

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