Renewed Trade Talk Hopes Keep Stocks in the Green

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Stocks closed in the green for a second straight session on Thursday as the long-awaited trade talks finally began and with more optimism than originally expected.  

After the market closed yesterday, we got a disheartening report that deputy-level trade talks went nowhere and the Chinese delegation was going to leave earlier than expected. Futures plunged as the algos took over.

Well, believe it or not, but that report was wrong.

Instead, President Trump thinks the trade talks are “going really well” and he will be meeting with China’s Vice Premier Liu He tomorrow.

That’s quite the change in tone in less than 24 hours… but aren’t we used to that by now?

It was only a couple days ago when visa restrictions and a trade blacklist seemed to doom this meeting altogether. And now investors believe that some kind of agreement is at least possible.  

Of course, the tone could change again just as quickly tomorrow.

For today though, the S&P advanced 0.64% to 2938.13, while the NASDAQ rose 0.60% (or around 47 points) to 7950.78. The Dow was up 0.57% (or 150 points) to 26,496.67.    

The major indices have each advanced by well over 1% over the past two days, though they are still down for the week heading into Friday.

But its nothing that some good trade news can’t fix!

Though a comprehensive deal still seems out of the question, it’s not too much to ask that the two sides come to some sort of truce that might delay tariffs that are scheduled to be raised as soon as next week.

If we get a few good headlines like that, then the major indices should have enough fuel to rally on Friday and help the Dow and S&P snap their three-week losing streaks.

The bigger question is whether or not a minor agreement would be enough to get stocks back to new highs.

But first things first… let’s see what happens tomorrow.

Today's Portfolio Highlights:

Home Run Investor: The rise of sportsbooks in this country will be a big boon for the gaming sector. Brian plans to capitalize by adding Scientific Games (SGMS), a Zacks Rank #2 (Buy) developer of technology-based products and services for worldwide gaming and lottery markets. The company seems poised to reach profitability in 2020, so the editor is getting in now. Read more about this new addition in the full write-up.

Counterstrike: The market shrugged off concerns from earlier this week and has actually gained the past couple of sessions as the trade talks begin. However, Jeremy is concerned that the market could go right back down, especially if there’s another negative headline (a very real possibility). Therefore, the editor decided to cash in some of his gain in SolarEdge Technologies (SEDG), which has been more volatile of late. Half of the position was sold for a return of 18.8% in just about a month. 

Stocks Under $10: Never let it be said that Brian doesn’t listen to his subscribers! Several of them had written to him about a company called Digital Turbine (APPS) and its “wonderful chart”. Well, on Thursday, the editor added this Zacks Rank #2 (Buy) after a recent pullback. APPS offers products and solutions for mobile operators, device OEMs and third parties. More specifically, it connects top mobile operators, OEMs and publishers with app developers and advertisers around the world. The editor really appreciates that this company has beaten the Zacks Consensus Estimate over the past four quarters with an average surprise of 125%. So it doesn’t just beat expectations, it trounces them! Learn a lot more about this new addition in the full write-up.

Until Tomorrow,
Jim Giaquinto

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