The Fed Hiked And The Market Yawned

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That headline would have been considered preposterous not too long ago. The mere mention of a rate hike was once enough to rattle the markets. But that was then and this is now. With investors feeling pretty good about the economy, the market just wants to avoid any shocks or surprises. The Fed was expected to raise rates by a quarter percentage point…they ended up doing just that…so all was right in the market.

The Dow increased by 0.33% to 24,585.4, marking its fourth straight day with a new high, and the NASDAQ increased 0.20% to 6875.8. However, the S&P was weighed down by bank stocks and finished with a slight loss of 0.05% to 2662.9, breaking three straight days of record highs. Overall, it was a muted reaction to what several editors considered a “non-event”.

On the other hand, tax reform will most certainly not be a non-event. Republican lawmakers and President Trump all sounded optimistic on Wednesday that a deal is afoot and that it could be signed before Christmas. We’ll see…

In the portfolios, it was a session full of swaps. Insider Trader, TAZR Trader and Surprise Trader all sold stocks for double-digit returns and then bought new positions. Meanwhile, Home Run Investor added a company today that should benefit from iPhone sales during the holidays. See the highlights section below for more.

Today's Portfolio Highlights:

Insider Trader: For the past three weeks now, shares of Hain Celestial (HAIN) have been trading sideways. Fortunately, the portfolio picked up this natural products company before the malaise set in, and Tracey sold it today for a profit of approximately 15%.

The editor is keeping the portfolio 100% invested by moving that cash right into PayPal Holdings (PYPL), the popular digital and mobile payment operator. PYPL is expected to grow earnings 24% this year and another 20% next year. The stock is up 64% year to date, but that didn’t scare away one of the directors from buying shares. This marked the first insider buy at PYPL. “I'm excited we're getting this buying opportunity,” said Tracey. Read the complete commentary for more.

TAZR Trader: Street targets for United Rentals (URI) are at $165 to $170, which means this approximately $163 equipment rental staple is pretty close to the mark. Kevin decided that this was a great time to cash in his chips in URI and take a nice 12.7% return. At the same time, the sell finally allowed the editor to add more shares to SMART Global (SGH), a Zacks Rank #1 (Strong Buy) electronic subsystems company. Kevin has been waiting for a chance to make this move, since he considers SGH to be “a tech value I want to own”. Read the full write-up for more on today’s moves.

Surprise Trader: Who says earnings season is over? Dave keeps finding good companies that have yet to report, such as Conagra Brands (CAG). The food company reported a huge 12.2% earnings surprise in its last report, which has the editor feeling pretty good about the next report on Thursday, December 21. Meanwhile, the portfolio also sold Tyson (TSN) today for a more than 12% return in just a little over a month. Read the full write-up for more.

Home Run Investor: You can bet that a lot of people will be receiving new iPhones for Christmas. In fact, Brian Bolan actually IS betting on it. On Wednesday, the editor bought Zagg (ZAGG), a maker of cell phone cases and covers. Usually, an overdependence on one company is considered a negative (even if its Apple), but that’s not the case when iPhones 7, 8 and X are all reported to be flying off the shelves this holiday season. In addition, ZAGG has beaten earnings estimates in five of the last six quarters, is enjoying rising earnings estimates, and is trading at a good valuation. Get more specifics in the full write-up.

All the Best,
Jim Giaquinto

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