Stocks Rise for Third Straight Week

A late-session selloff kept the S&P from another record and snapped the major indices’ four-day winning streak.  

But let’s not be too demanding, especially in a low volume summer session. Stocks still rose for the third consecutive week to continue a spectacular month of June.

Any advance for the S&P would have given the index another record on Friday, but it just couldn’t hold onto its gains. It slipped 0.13% to 2950.46 after closing at a new high yesterday for the first time since April 30.  

The Dow momentarily eclipsed its closing high from October 3, but ultimately slipped by 0.13% (or about 34 points) to 26,719.13.

The NASDAQ saw the steepest decline on a percentage basis with a slip of 0.24% (or nearly 20 points) to 8031.71. 

However, the tech-heavy index had the best weekly advance of 3%, while the Dow and S&P rose 2.4% and 2.2%, respectively.

This week was all about the Fed… as this year has been as well. The rally of 2019 started when the Committee made a sudden dovish turn in January, and continued on Wednesday when they left the door open for rate cuts in July and beyond.

And you can bet the market is certainly expecting those cuts in the coming months!

We also enjoyed some good news on the trade front this week when it was announced that President Trump and China President Xi would be meeting at the G-20 in Japan.

This summit will likely be the main event next week as the market hopes for some progress in the trade conflict after a long stalemate.

We’re not looking for a miraculous resolution that comes out of nowhere… just some forward progress that could give this month a strong finish and instill some positive sentiment  moving forward.

Is that too much to ask?

Today's Portfolio Highlights:

Large-Cap Trader: The portfolio put more of its ‘set-aside’ cash to work on Friday with a 5% allocation in large-cap credit card company Mastercard (MA). It has an impressive history of beating the Zacks Consensus Estimate, stretching back to 2015. Most of the 19 covering analysts have raised their estimates for the next quarter. None have lowered. John also likes MA’s solid market position, expanding digital initiatives and the shift toward electronic payments, which all have the company poised for growth. Its numerous acquisitions haven’t hurt either. Read the editor’s full analysis of this new buy in the complete commentary.  

Home Run Investor: Good earnings growth on a year-over-year basis and estimates that are trickling higher. That’s what Brian loves to see when searching for a new pick… and that’s exactly what he’s seeing with Simulations Plus (SLP). This Zacks Rank #2 (Buy) is a small-cap software play. More specifically, it develops drug discovery and development simulation software that help drug and biotech companies conduct their research. SLP has beaten the Zacks Consensus Estimate in three of the last four quarters. If operating margins continue to grow, the editor thinks this stock will really run. Read the complete commentary for more on this new addition.

Surprise Trader: Here’s to Constellation Brands (STZ)! Dave bought this alcohol beverage company today ahead of its next quarterly report on Friday, June 28, before the bell. This Zacks Rank #2 (Buy) has beaten earnings expectations for three straight quarters and has been known to swing wildly after a report. STZ seems poised for another positive surprise next week with an Earnings ESP of 3.2%. See the complete commentary for more on this new addition.

Stocks Under $10: After getting beaten up in May, The Rubicon Project (RUBI) has been in recovery mode throughout June. Brian likes the progress that the company has made and thinks it can continue, so he added RUBI on Friday. This Zacks Rank #1 (Strong Buy) is a global technology company that’s focused on automating the buying and selling of advertising. It has beaten the Zacks Consensus Estimate for four straight quarters now with an average surprise of nearly 64% in that time. The last beat was over 26%. Read the full write-up for more.

Options Trader: Two bull call spreads expired today and brought the maximum profit possible to the portfolio. The Cree (CREE) June 48/55 spreads closed fully in the money and banked a gain of 144%. Lennox (LII) was in the same situation as the June 230/240 calls led to a profit of 111%. The Burlington (BURL) spreads also expired today for a small loss. See the full commentary for more on today’s big returns.

Technology Innovators: The software space seems to have Brian’s attention. He bought in all three of his services on Friday… and all of them were in software. The pick for this portfolio was OptimizeRX (OPRX), which provides consumer and physician platforms to help patients better afford and comply with their medicines and healthcare products. This Zacks Rank #1 (Strong Buy) has rising earnings estimates (of course), a good history of beating the Zacks Consensus Estimate and a great-looking chart. The complete commentary has more on this new buy.

Have a Great Weekend!
Jim Giaquinto

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