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New Week Kicks Off with New Gains

Jim Giaquinto

Returning from a strong weekly performance, the major indices kept rallying as they got back to work on Monday.

The S&P advanced 0.37% on Monday to 2832.94, while the NASDAQ increased 0.34% to 7714.48.

Last week, these indices jumped nearly 3% and nearly 4%, respectively, due to a strong performance from technology. But today they had to fight through an almost 3.5% plunge in Facebook as it was downgraded after departures from a couple high-profile officials.

However, the FAANG names still had strong performances from the likes of Amazon (+1.7%) and Apple (+1%), as technology weathered the storm from the social media giant.

The Dow had its own stock-specific challenge on Monday with Boeing off another 1.77% after sliding about 10% last week. According to the Wall Street Journal, the Department of Transportation will be looking into the aerospace giant’s 737 Max jetliners after two devastating crashes in less than 5 months.

Nevertheless, the Dow still recovered from a midday slide into the red to post an advance of 0.25% (or about 65 points) to 25,914.1.

Don’t expect any trade breakthroughs this week as we are still waiting on the meeting between President Trump and China President Xi. But the market’s in a good mood at the moment, so just the scheduling of such a get-together would be a nice boost to stocks… even if it doesn’t happen for another month or so.

Much more definite, though, is the two-day Fed policy meeting that starts tomorrow. Nobody expects the Committee to make any changes to rates, but, as usual, we’ll be paying very close attention to any hints of their future plans in the statement. One of the major reasons why we’re having such a strong start to 2019 is the “patient” promise by Fed Chair Jerome Powell early this year. The market expects him to reinforce that plan later this week. Let’s hope it’s not disappointed!

Today's Portfolio Highlights:

Technology Innovators: Despite a “good” quarterly report, shares of SailPoint Technologies (SAIL) traded lower because it wasn’t good enough at first blush. The portfolio owned this cyber security play last year and it brought a nice double-digit return. Brian Bolan was watching the market’s response to the quarter and noticed that the downward drift didn’t last. Therefore, he welcomed SAIL back into the service on Monday and expects a return to $32 as it makes up for the irrational pullback. Read the full write-up for more on this addition.

Healthcare Innovators: After surviving some turbulent news two weeks ago, Kevin felt this was a good time to get back into Align Technology (ALGN). The editor has long been a fan of this maker of Invisalign teeth straighteners. In fact, the portfolio pulled a double-digit profit from this name as recently as late January. But Kevin was most impressed by how ALGN responded to an arbitration ruling that forced it to close its Experience stores. The stock dipped hard, but then recovered with a good bit of institutional support. Though the valuation is still challenging after a slowing of the growth rate, long-term investors are back to focusing on a “1-billion-mouths” global addressable market. Read a lot more about this new buy in the complete commentary.

Black Box Trader: The portfolio made only two changes in this week's adjustment. It sold Anthem (ANTM, +3.7%) and Hertz Global Holdings (HTZ, +3.6%) and replaced them by buying Target (TGT) and Diebold (DBD). Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.

All the Best,
Jim Giaquinto

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