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Getting to Know President Trump

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NOTE: 2017 is NOT going to look or act like 2016. If you were thinking of doing the same thing over again this year, then make sure to read this week's Zacks Confidential . Steve gives the wheel to John Blank, who highlights three major asset-based swings that should make a difference in 2017. He also highlights a trio of stocks that have the most room to run this year. Read John's detailed article by clicking: New Year, New Rules.

The major indices came well off their lows on Monday, but still started the week on the negative side as the market comes to grips with President Trump. The new POTUS focused on trade in his first full work day in the Oval Office. Many investors are concerned that the plans are too protectionist…but ALL investors are trying to figure out what Trump's relationship will be with the market. Unfortunately, that takes time.

Speaking of protection, a few of the editors are looking for some shelter from a possible move lower during this "getting to know you" period between the White House and the market. You may remember that RTA recently put 10% into cash just in case the S&P slips back toward 2200. And as featured in the highlights section below, Zacks Counterstrike added a hedge to protect from a spike in volatility moving forward (though it also sold a few names to prepare for future earnings-related buys).

For the time being, Washington continues to be overshadowing earnings season, but this will be a very busy week with about 100 S&P companies scheduled to report. If the President can keep from doing anything too controversial, then the market may be able to reap some benefits from what's been a pretty good earnings season so far. On Monday though, the S&P was down 0.27% to 2265.2, the Dow was off 0.14% to 19,800 and the NASDAQ slipped by only 0.04% to 5552.9.

Today's Portfolio Highlights:

• Earnings season will present plenty of opportunities for Zacks Counterstrike, so Jeremy raised some cash on Monday by selling a couple of stocks that have stalled (NICE & NFX). Meanwhile though, the editor also added a hedge today to offset a spike in the VIX amid this market malaise. So he added an 11% allocation in iPath S&P 500 (VXX), which adds some protection for this very long portfolio. The plan is to get out of the position once S&P futures get above 2280. Read the complete commentary for more on all of today's moves.

• The Black Box Trader replaced four names in this week's adjustment, which started with getting out of FCX (+3.8%), UNH, LUK and STX. The new additions replacing these names are MGM Resorts (MGM), Best Buy (BBY), Citigroup (C) and CONSOL Energy (CNX). Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.

• "The first 100 days of a new administration are critical. That is when we see their key initiatives. Right out of the gate the Trump administration has been busy with proposed changes to healthcare, trade policy, taxes, regulations and more.

"However, that is all just talk. What matters is action. As in, what policies can they actually get passed through congress?

"Unfortunately investors hate this form of uncertainty, which explains why stocks have not been able to advance for more than six weeks. As clarity emerges on these policies, so too should the next round of stock market advances.

"Typically at this stage of the 1st quarter investors would be locked in on the importance of earnings season. That is especially true as 1/3rd of S&P reports this week. Certainly there will be ripples that come in from these reports, but the big waves are still emanating from DC at this time," said Steve in Reitmeister Trading Alert.

• "Today is really Trump's first full day in office and, as expected, a number of new policy initiatives were announced or at least broadly proposed. The first seems to be news from Trump that he wants to 'cut regulations by 75%' and impose a 'very major border tax'.

"Obviously, those are still very broad plans and it still remains to be seen which regulations are in the crossfire, and what constitutes a 'major' border tax. So, while we don't have a whole lot of specifics, I am at least encouraged that we have some idea of Trump's focus in the near term, as that appears to be economic policies.

"While I think that infrastructure is probably the best bet for Trump out of the gate, I think this focus on regulation and taxes is at least better than starting off with the more troublesome issues of Obamacare or immigration. Hopefully, by focusing on regulation, things will at least go a little smoother out of the gate before the real battles begin," said Eric in Surprise Trader.

All the Best,

Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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