Another Milestone After Another Trade Deal

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The market’s got trade-deal fever now that two agreements have passed in as many days! The major indices responded on Thursday with a fresh round of all-time highs, including a new milestone for the S&P. 

The USMCA trade deal, which is the U.S./Mexico/Canada agreement that replaces NAFTA, passed the Senate today with 89 votes. It’s now headed to President Trump’s desk. 

This comes just one day after the Phase 1 trade deal between the U.S. and China was signed in Washington. The market gave back most of its gain yesterday once the deal was done, but today it rallied right into the close!  

The NASDAQ soared by 1.06% (or nearly 100 points) to 9357.13, as Alphabet officially became the fourth company with a trillion-dollar market cap.

The Dow continued to soar past 29,000 by advancing 0.92% (or about 267 points) to 29,297.64. The index closed above that milestone for the first time just yesterday! 

And speaking of milestones, the S&P rose 0.84% to 3316.81 for its first close above 3300. 

All of the indices finished at record highs as the bulls really hit the gas late in the session.   

In addition to all the trade news, we’re at the very start of earnings season. The big winner today was Morgan Stanley, which soared approximately 6.6% after beating on the top and bottom lines for its fourth quarter. 

The big banks kicked the season off on Tuesday with a strong showing from JPMorgan, with subsequent reports being mostly positive. 

The day also enjoyed some good economic reports for initial jobless claims and retail sales. 

The major indices head into Friday’s session with solid gains for the week. The NASDAQ will be going for its sixth straight week in the green, while the Dow and S&P will each look for back-to-back advances.

Today's Portfolio Highlights:

Surprise Trader: You don’t often see companies that deal in real estate AND natural resources, which makes Forestar Group (FOR) a unique company. It is a residential lot development company, but also manages acres of oil & gas mineral interests. Dave is most encouraged by an Earnings ESP of 20% for the quarter coming after the bell next Thursday, January 23. Revenue growth is also expected to jump more than 67% this year and almost 19% more next year. The editor added FOR on Thursday with a 12.5% allocation. Read the full write-up for more.

Blockchain Innovators: It was exactly one week ago today that Dave picked up Origin Agritech (SEED), and the stock has already soared double digits. The editor expected to hold onto this crop seeds company for a bit longer, but sometimes you’ve just got to take that profit when it comes. He sold SEED for a 35.2% return in just 7 days. The portfolio replaced that name by adding iClick Interactive (ICLK), a Zacks Rank #1 (Strong Buy) provider of an online marketing technology platform. The company is already using blockchain in its project with i-House.com, and is now looking to develop blockchain technology products and services on its own. Dave also appreciates the rising earnings estimates. Read the full write-up for more on today’s moves.

Healthcare Innovators: Ahead of the much-anticipated JPMorgan Healthcare Conference this week, Exact Sciences (EXAS), maker of the Cologuard cancer test, reported preliminary numbers for its Q4. Some confusion about the sales and growth rates, due to the recent acquisition of Genomic Health, saw investors react by taking shares down 14% on Monday. Kevin had already been eyeing this premier diagnostic duo and was hoping to buy shares in the mid-$80s. He advised members of Healthcare Innovators to start a position today as the company plans to launch its next big test for liver cancer. While he waits for analyst reaction after meeting with management at the conference, Kevin is going over the company's presentation deck and will have more details on the growth story this week. Read his full write-up for more specifics on this new addition.

All the Best,
Jim Giaquinto

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