New Records and New Milestones

Stocks finally had a respectable rally on Friday, ending the week with new milestones, new highs and new totals for their weekly winning streaks.

Each of the major indices made history at least once in the previous four days with rather modest advances, but today they ALL jumped by more than 0.7% to new records.

They also crossed some of those psychological barriers that we all love to write about!

The Dow is now above 28,000 for the first time ever. It jumped 0.80% (or nearly 223 points) on Friday to 28004.89.

The S&P had momentarily crossed over 3100 earlier, but today it closed well above that mark by rising 0.77% to 3120.46. And the NASDAQ finished atop 8500 with a rise of 0.73% (or nearly 62 points) to 8540.83.

Of course, all three of the indices closed at record highs for the session. Perhaps most importantly though, they also continued their weekly winning streaks.

The NASDAQ gained 0.8% over the past 5 days and has now been in the green for SEVEN straight weeks. The S&P is right behind with a 0.9% advance for its SIXTH consecutive week of gains.

The Dow had the best performance with a gain of 1.2%, helping its winning streak move to FOUR weeks.

Well, this was supposed to be the weekend when that pesky Phase 1 trade deal would be signed during an international conference in Chile. But that whole global get-together was cancelled by the country.

Instead, we had to settle for some positive words from National Economic Council Director Larry Kudlow. He talked about constructive conversations and that a deal was probably near… and all the other good stuff that the market likes to hear in lieu of any real progress.

It was apparently enough given the rally on Friday. Despite a few “snags” here or there as reported earlier, the market has decided to remain positive as long as the two sides continue talking… for now, at least.

By the way, it’s worth noting as we enter the holiday shopping season that retail sales in October grew 0.3%. That was better than expectations of 0.2% and reversed the previous month’s dip. However, big-ticket items were soft.

So we’ll enter next week with earnings season practically over, a trade deal in limbo and the market at all-time highs with Thanksgiving right around the corner.

Buckle up for the homestretch of 2019!

Today's Portfolio Highlights:

Value Investor: The first FDA-approved cannabis-derived drug is Epidiolex, which treats seizures for a couple epilepsy syndromes. Eventually, analysts expect this to be a $1 billion+ drug, especially once European sales really take hold. That’s certainly great news for its maker, GW Pharmaceuticals (GWPH). However, shares of the company have sold off along with all the other cannabis stocks. Tracey thinks it’s completely oversold right now, and so she added GWPH on Friday. Revenue is expected to rise 93% next year and analysts have an outperform rating on the shares. Read the full write-up for more and find out why the classic value fundamentals of P/E and P/B don’t work as well in a position like this.

Counterstrike: The market continues to reach new highs, but Fortinet (FTNT) just can’t get past its targets. If he doesn’t get out now and the stock slips, Jeremy would have lost an opportunity for a double-digit profit and would have to sit on it and wait for another leg up. The editor cut to the chase on Friday and sold the cybersecurity company for a nice 26.6% return in a little over 2 months. The portfolio also sold half of Paycom Software (PAYC) and all of IPath Series B S&P 500 VIX Short-Term Futures ETN (VXX); the former bringing a profit of 6.2%.

Surprise Trader: Sometimes sales mean more than earnings, especially in the biomedical and genetics industry. Therefore, Dave is paying particular attention to the $1.88 million in revenue expected for Ascendis Pharma (ASND), a Zacks Rank #2 (Buy) that develops drugs for hormone deficiency, endocrinology, the central nervous system, infectious diseases and diabetes. The company reports after the bell on Monday, November 18. Nevertheless, ASND still has a positive Earnings ESP of 8.03% for the quarter. The portfolio also got out of Twin River (TRWH). Read the full write-up for more on today’s moves.

Stocks Under $10: Shares of Vapotherm (VAPO) have been all over the place of late. In fact, this medical products company finished today’s session over $10. However, when Brian bought this Zacks Rank #2 (Buy) this morning, it was below the mark. More importantly, the stock had been as high as $12 in the recent past. The editor added VAPO on Friday as part of his plan to get more aggressive. Read the full write-up for more.

TAZR Trader: The chart setup for Designer Brands (DBI) is looking pretty good heading into early winter. The sales and profit growth for this shoe warehouse (formerly known as DSW) has also caught Kevin’s attention, especially given all the boots that will be sold in the next few weeks. The editor added this Zacks Rank #2 (Buy) on Friday with a 10% allocation ahead of its December 10 report. Read the full write-up for a lot more on this new addition.

Have a Great Weekend!
Jim Giaquinto

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