Markets

Stocks Can See Clearly Now

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With the election out of the way, the market can finally focus on how solid the economy really is...and has been for a while. A number of positive reports were released today, including a more than 25% surge in housing starts for October and the lowest level for weekly jobless claims in more than 40 years. Plus, inflation didn't rise as much as was expected last month. During the election season, such strong reports fell on deaf ears over and over again. But stocks can see clearly now and moved higher on Thursday.

The S&P advanced by 0.47% today to 2187.1, while the Dow increased 0.19% to 18,903.8. The NASDAQ put together its third consecutive positive session by jumping 0.74% to 5334. The market even seems to be comfortable with the idea of a rate hike next month, as Fed Chair Janet Yellen said such a move could come "relatively soon" . In fact, CME FedWatch has the likelihood of a hike in December at more than 90%! And yet the market still had a solid session. The editors are feeling pretty good that we will be hitting new highs very soon now. For example, Jeremy and Steve are both expecting milestones right around Thanksgiving.

The portfolios took a bit of a breather on Thursday after several active days. But we still saw Options Trader and Tactical Trader each add positions. Learn more below:

Today's Portfolio Highlights:

• Shares of Best Buy (BBY) broke out of a couple bullish symmetrical triangles today, which has Kevin thinking that this approximately $46 stock will be moving up to $61.50 eventually. He bought two bull call spreads in BBY on Thursday for Options Trader to take advantage of this expected advance. If the stock moves up 7% by expiration, then the position will gain 145%. By the way, BBY is a Zacks Rank #2 (Buy) with a Zacks VGM Score of "A". It just reported a positive EPS surprise of nearly 32% in its most recent quarter, along with better-than-expected sales and a raised EPS guidance for next quarter. Get the specifics on these spreads in the complete commentary.

• After a strong quarterly report, Acacia Communications (ACIA) returned to Zacks Rank #1 (Strong Buy) status. This maker of optical interconnect products watched the Zacks Consensus Estimate for 2017 soar 22% to $2.87. Kevin thought the company would make a good member of Tactical Trader , so he bought ACIA with a 7.5% allocation. Read the complete commentary for a lot more on this new addition.

• "We saw a massive decrease in initial jobless claims, as just 235,000 applied for new benefits, down from the consensus expectation of a three thousand person rise to 257,000. This was an extremely low figure, and was actually the lowest since Nixon was still in office, suggesting a pretty robust jobs market.

"With a continuation of this impressive trend, it is hard to deny that the jobs market is on fire right now. Unemployment levels are extremely low, and there appears to be little concern on the horizon for this important part of the market.

"The real question remains, when is this trend going to translate into gains on the wage front? That is something that we really haven't seen just yet, and that remains the key to breaking out on the inflation front, and putting pressure on the Fed," said Eric in Surprise Trader.

• "Janet Yellen came as close as possible to saying that a rate hike was on the way at the December meeting when she used the following phrase on Thursday: 'could well become appropriate relatively soon'.

"She might as well have winked when she said it because conditions are perfect for such a move. For starters, GDP Now estimates for Q4 are all the way up to +3.6%. On top of that inflation is bubbling up a little and Jobless Claims was 10% better than expected and a new expansion low.

"If they are data dependent…then they have already been given a BIG green light to move ahead with the rate hikes. The official announcement of which is still a few weeks away. However, at this point you can put it in the bank," said Steve in Reitmeister Trading Alert.

Have a Good Night,

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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