Stocks Get Stuck Waiting for Trade Deal

SPECIAL NOTE: The March episode of the Zacks Ultimate Strategy Session will be available for viewing no later than Wednesday, March 13. Kevin Matras, Tracey Ryniec, Jeremy Mullin and Neena Mishra, CFA, FRM, will cover the investment landscape from several angles in this popular event.

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• Tracey and Neena Agree to Disagree on whether you should invest in cryptocurrencies or were they just a fad that’s now over?
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The market had nowhere to go on Tuesday. A trade deal feels like it’s right around the corner after months of frustration… and investors can’t find anything else to pique their interest in the interim. As a result, the major indices chopped around today and finally settled slightly in the red by the close.

The S&P continued to move away from 2800, which it closed above on Friday before giving it back yesterday. The index slipped 0.11% Tuesday to 2789.65. The Dow was off 0.05% (or about 13 points) to 25,806.63, which is a whole lot better than yesterday’s loss of more than 200 points. The NASDAQ continued to outperform its counterparts with a dip of only 0.02% to 7576.36.

The vibes coming from the trade talks remain mostly positive. Secretary of State Mike Pompeo provided today’s dose of guarded optimism in a speech in Iowa. But it’s just not working the way it used to. The market jumped on any positive headline throughout most of February on optimism that the talks between the U.S. and China were on the right track and would lead to an agreement.

However, the nerves are getting worse the closer we get to what will hopefully be the end. Will it be a “good” deal? Will the market sell on the news? Headlines aren’t enough anymore. Now it’s time for specifics. The market may not be able to move much higher until we get some resolution on trade.

And that’s too bad, because there was other good news worthy of attention. Kohls and Target each reported strong quarters that led to gains of 7.3% and 4.6%, respectively, in the session. These results are especially encouraging as the market is still scratching its head over the surprisingly poor retail sales figures for December. We also received a good ISM Services report on Tuesday.

Today's Portfolio Highlights:

Marijuana Innovators: This new portfolio is wasting no time in filling out the roster. Dave Borun added his first three names yesterday… and today he picked up another SEVEN! The new buys are:

• INSYS Therapeutics (INSY)
• Constellation Brands (STZ)
• Innovative Industrial Properties (IIPR)
• Altria Group (MO)
• Scotts Miracle-Gro (SMG)
• Tilray (TLRY)
• Cronos Group (CRON)

Read the complete commentary for specifics on why the editor added each of these stocks.

Stocks Under $10: Medical equipment companies have been following the biotech space higher… and Brian Bolan wants to be along for the ride. On Tuesday, he added ViewRay (VRAY), a Zacks Rank #2 (Buy) that develops advanced radiation therapy technology for the treatment of cancer. The editor wants to be in this name when VRAY reports next week. The stock has been climbing slowly by steadily higher since hitting its low of $5 in late December, and Brian doesn’t feel that it’s done. The full write-up has more on this new addition.

Surprise Trader: The airlines space is in the top 2% of the Zacks Industry Rank, which was one of the main reasons why Dave bought Azul (AZUL) on Tuesday. This South American airline is also a Zacks Rank #1 (Strong Buy) with a good history of beating earnings expectations. And with a Positive Earnings ESP of 7% for the quarter coming on March 14th, AZUL looks poised to keep its winning streak alive. The editor also sold Mallinckrodt (MNK) for a 5.5% return in about two weeks as the pharma company’s post-earnings drift is slowing down. Read the complete commentary for more on today’s moves.

Zacks Short List: The portfolio swapped out three positions this week. Firstly, it short-covered Agnico Eagle Mines (AEM, +1.2%), Occidental Petroleum (OXY) and The New York Times Co. (NYT). It then replaced these names by adding Tesla (TSLA), Baidu (BIDU) and Murphy Oil (MUR). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.