A Junior Freak Out

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President Trump has a way of getting under the market’s skin. So when an email thread was released today between his son, Donald Trump Jr., and a Russian lawyer (which some took as "collusion"), the market’s kneejerk reaction was to take a plunge. However, stocks regained their composure rather quickly this time, which was in stark contrast to the May 17th bloodletting on allegations that POTUS interfered in a FBI investigation. 

By the closing bell, the NASDAQ had put together its third straight session of gains with an advance of 0.27% to 6,193.3, while the Dow was breakeven (up 0.55 of a point) to 21,409.1. The S&P declined 0.08% to 2425.5. 

The editors feel that the market’s recovery today was a great sign that the bulls are still solidly in control and that stocks want to move higher. For example, Kevin decided to sell all UVXY shares in TAZR today, which he bought earlier this month to protect the portfolio from a pullback ahead of earnings season. “The market has spoken again today saying it wants little to do with the downside,” said Kevin. 

Today's Portfolio Highlights: 

Home Run Investor: Using physical cash to buy products and/or services is getting obsolete. Dave wants a stake in the NEW ways of moving money around. EEFT already provides some exposure to this innovative industry, but he wants more. Therefore, the editor bought a position in Square (SQ) on Tuesday, which provides point-of-sale solutions and has a peer-to-peer payments service. This Zacks Rank #2 is expected to grow revenue by 25% this year and next, and is back on the move after a month of consolidation. The complete commentary has a lot more on this new addition. 

Healthcare Innovators: Shares of immune-oncology player Bluebird Bio (BLUE) soared to an unsustainable $120 after the ASCO convention, but it has since come back down to earth. It has actually dropped all the way below $95 and into an ideal buying range for Kevin. The editor made BLUE the portfolio’s 27th holding as he works up to the full complement of 30 names. The full commentary has a lot more on this new addition. 

Stocks Under $10: Brian Bolan agrees with a well-known investment pundit that the EU is a good place to invest in the near term. So the editor decided to pick up Netherlands-based Constellium (CSTM) for his promised pick today. The company is a Zacks Rank #2 that sells aluminum products for the aerospace, automotive and packaging industries. The company has reported top-line beats in its last two quarters and announced a positive earnings surprise of 44% in its most recent report. CSTM is also expected to generate double-digit growth for revenue and earnings this year. Don’t miss Brian’s detailed analysis of this new pick in the full write-up. 

Zacks Short List: Only one swap in this week's adjustment as National Oilwell (NOV) was short-covered and left the portfolio, while PTC Inc. (PTC) was added. Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.  

Surprise Trader: The portfolio is now all clear and ready for earnings season after Eric sold the remaining three positions. Deere (DE) was the big winner with a return of 11.8% in less than two months. Earnings season is the busiest time for this portfolio, so get ready for a lot of action in the days ahead. The editor is planning on some replacement picks later this week or early next. 

Zacks Counterstrike: "So here we go again. This absurdity continues to come out every other week which often brings selling into the market. It’s impossible to speculate if this will ever materialize into any trouble for Trump, but so far nothing has been an real issue. So all we can do is assume the same this time and go on with our trading lives.

"While the initial market reaction was fear and panic, with the S&P selling and the VIX spiking, traders eventually calmed down. The S&P finished came all the way back to where it was before the news and the S&P closed only 0.08% lower, while the Nasdaq was up 0.27%.

"The move today was pretty telling. We saw a headline that should have been pretty bad news for stocks, but yet we moved back to highs of the day. This clearly shows the bullish nature of this market. Unfortunately for the bears, they showed there hand today and it’s pretty darn weak. The bulls still have complete control, but I’m puzzled to what they are waiting for to push the market highs." -- Jeremy Mullin

Until Tomorrow,
Jim Giaquinto

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