A Hectic but Positive First Full Week of 2020

You didn’t think we’d have a quiet, uneventful final day to this crazy week, did you? 

Instead, we got a slightly disappointing jobs report, the Dow briefing crossing over another psychological milestone, and new sanctions on Iran. 

The major indices started the day in the green before slipping into negative territory and ending near the day’s lows. However, they were all positive for the week!

The NASDAQ now has a 5-week winning streak after leaving its counterparts in the dust with a 1.8% jump over the past five days. 

The S&P had a 5-week run snapped last Friday, but its back on the plus side with a 0.9% advance, while the Dow was up 0.7% this week.

But these gains got no help from today’s session. The indices spoiled a positive morning by heading lower shortly after the Dow surpassed 29,000 for the first time. The index finished lower by 0.46% (or about 133 points) to 28,823.77. 

Also, the S&P was down 0.29% to 3265.35 while the NASDAQ slipped 0.27% (or nearly 25 points) to 9178.86. 

The big market news on Friday was the economy adding 145,000 jobs in December, which missed expectations by around 15,000 jobs.    

While the media understandably called the report a disappointment given all the beats we’ve been seeing, we should remember that unemployment remains at historical lows. 

Stocks initially brushed off the report before heading lower, suggesting that today’s dip was more profit-taking after setting a fresh round of new highs on Thursday rather than fears of a slowing economy. 

And next week promises to be just as eventful, if not more so. We’re expecting the Phase 1 trade deal to be signed, as a Chinese delegation headed by Vice Premier Liu He will be in Washington.

As if that wasn’t enough, earnings season unofficially begins with big banks like JPMorgan, Citigroup, Wells Fargo, Bank of America and others scheduled to report.

We’ll also be keeping a watch over the situation with Iran. There’s been no military action since Iran’s airstrikes on Tuesday night, but the White House did initiate new economic sanctions on the country this morning.

Today's Portfolio Highlights:

Home Run Investor: As promised earlier this week, Brian did a little fine-tuning to the portfolio this morning. Firstly, the editor sold photomasks manufacturer Photronics (PLAB) after the stock fell back a bit lately, bringing a return of 33.8% in less than three months. The underperforming The Joint Corp. (JYNT) was also sold today. One of those names was replaced on Friday by adding Covanta Holding Corp. (CVA), a Zacks Rank #2 (Buy) that makes energy from waste. The company beat by 150% in its most recent quarter and will add some diversification to the portfolio. Brian believes the stock could surpass $20 moving forward if the outlook for 2020 improves. Learn more about CVA and all of today’s moves in the complete commentary.

Surprise Trader: Big banks like JPMorgan, Citigroup and Bank of America, among others, will be (unofficially) kicking off earnings season next week. Hancock Whitney (HWC) isn’t a household name like those others, but this regional bank out of the Southeast will be among those going to the plate. This Zacks Rank #2 (Buy) has a positive Earnings ESP of 1.83% for the report coming after the bell on Wednesday, January 15. The stock moved solidly higher after a penny beat last time, and Dave wants to be onboard for another potential advance. He added HWC on Friday with a 12.5% allocation. Read the full write-up for more.

Marijuana Innovators: The Canadian growers may still be facing some challenges, but the market seems to warming up to derivatives and pharmaceuticals once again. Therefore, Dave added Constellation Brands (STZ) and Zynerba (ZYNE) on Friday. Read the complete commentary for all the specifics on these new additions.

Have a Great Weekend!
Jim Giaquinto

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