Even Negative Trade News Can't Keep this Market Down

Two of the major indices fought through a negative trade headline on Wednesday to register another round of new highs.

Stocks were doing just fine today until a Wall Street Journal report stated that the trade deal was running into some roadblocks on several issues, including agricultural buys and existing tariffs, among other factors.

The indices plunged on the news. However, they didn’t go on one of those 1%+ selloffs that we’ve seen in the past. In fact, they even managed to largely recover by the closing bell.

In the end, the Dow gained 0.33% (or about 92 points) to 27,783.59, while the S&P rose 0.07% to 3094.04. That’s new records for each of those indices.

The NASDAQ was the only major index to make history yesterday… and was the only major index to fall short today. However, it was only down 0.05% (or about 4 points) to 8482.1.

Disney was a big help on Wednesday as the entertainment powerhouse jumped 7.3%. It turns out that the company’s new streaming service, Disney+, has signed up 10 million subscribers since its launch… which just happened to be yesterday!

There was also some testimony in Washington that the market was paying close attention to. No, not the impeachment rigamarole, but Fed Chair Jerome Powell speaking to the Joint Economic Committee.

He had some very positive things to say about the economy, and also stated that rates will remain on hold barring a material change in the outlook.

So we probably shouldn’t get our hearts set on another rate cut this year, but there are also no hikes on the near horizon.

Stocks continue to tread water right around all time highs. They had an opportunity for a sharp pullback on Wednesday, but decided not to take it.

That’s certainly positive, but how much longer will it last? Let’s get that trade deal done!

Today's Portfolio Highlights:

Home Run Investor: This portfolio is now at a full complement of 15 names after buying Dynatrace (DT) on Wednesday. This Zacks Rank #2 (Buy) is a software intelligence company that provides application performance management, AI for operations, cloud infrastructure monitoring and digital experiences management. In other words, it has a bunch of buzzwords (e.g. “cloud” and “AI”) that screams “aggressive” to Brian. Well, that’s exactly what the editor is looking to add to this portfolio amid this solid market environment. Read the full write-up for more on this new addition.

Value Investor: As stated in the commentary, Disney (DIS) had an impressive 24 hours. The Disney+ steaming service signed up 10 million subscribers in its first day! Shares rose 7.3% on Wednesday, giving this portfolio the best performer of the day among all ZU names.

All the Best,
Jim Giaquinto

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