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Stocks Have a Something-Is-Better-Than-Nothing Rally

SPECIAL ALERT: The October episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this “must-see” event when Kevin Matras, David Borun, Jeremy Mullin and Sheraz Mian discuss the investment landscape from several angles.

Don’t miss your chance to hear:

• Sheraz and David Agree to Disagree on whether resolution of the trade issue will spark a new stock market rally
• Kevin answers questions covering impeachment and the markets, what to expect and what history has shown us in Zacks Mailbag
• Sheraz and David choose one portfolio to give feedback for improvement
• And much more

Simply log on to Zacks.com and view the October episode here. And please let us know what you think of this format. Email all feedback to mailbag@zacks.com.


The major indices got back more than half of yesterday’s selloff on Wednesday, as sentiment for this week’s trade talks was a little more optimistic (or at least not as pessimistic).  

Since expectations for a comprehensive trade deal seemed to fall off a cliff on Tuesday, the market appreciated news that China was open to a partial trade agreement.

Investors like the idea of getting something out of these trade talks, which finally get underway tomorrow.

The NASDAQ jumped 1.02% (or nearly 80 points) to 7903.74 today, while the S&P was up 0.91% to 2919.4. The Dow rose 0.7% (or a little more than 180 points) to 26,346.01.  

Late news of China lowering expectations for the meeting took a little air out of the rally, but nothing like yesterday’s late plunge. In fact, the indices held onto a lion’s share of its gains by the close.

We’ve finally made it to the actual trade talks after an exhausting week of rising pessimism. The worst was yesterday when stocks plunged after the U.S. initiated visa restrictions and added more companies to its trade blacklist.

In the end, each of the major indices were down by well over 1% on Tuesday.    

But now we have our first green of the week with real trade talks about to begin.

It’s no mystery what happens from here. Jeremy Mullin said it best in Counterstrike:

“Investors are itching for a deal and if we get one, we should see a large up move. For that reason, every time we get some hope, we see a market that grinds higher. Conversely, when we get negative news, we take the elevator down as everyone panics.”

So the only question now is what’s going to happen at these trade talks? Actually, it's been that same question since these meetings were first announed weeks ago, but now we're finally close to an answer. Fingers crossed…

Today's Portfolio Highlights:

Surprise Trader: It’s almost time for earnings season, and Dave kicked things off on Wednesday with the addition of United Airlines (UAL). The company has a positive Earnings ESP of 3.18% for the quarter coming after the bell on Tuesday, October 15. The portfolio had lots of success with airlines last quarter, and a recent upward revision so close to the quarterly report has the editor feeling confident that the success will continue. He added UAL with a 12.5% allocation. Read the full write-up for more.

All the Best,
Jim Giaquinto

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