Market Tanks on Tariff Talk

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President Trump’s statement on tariffs dashed any hopes of a strong start to March. Stocks weren’t exactly soaring before the news, but they certainly plunged after it. In the end, the market declined by more than 1% for a third straight session.

The idea is to impose tariffs of 25% on steel and 10% on aluminum imports, which has folks concerned about rising prices and even a trade war. The Dow dropped by 1.68% (or about 420 points) to 24,609, while the S&P slipped 1.33% to 2677.7. The NASDAQ was off 1.27% to 7180.6.

While the market was digesting the latest turn of events, the editors were making moves. Nothing was happening in the portfolios yesterday, but they made up for it on Thursday. Income Investor sold a utility name for a double-digit profit and then picked up a new stock that should capitalize on healthy construction spending. We also saw buys in TAZR Trader, Momentum Trader, Insider Trader, ETF Investor and Home Run Investor. All the plays are highlighted below:

Today's Portfolio Highlights:

Income Investor: Rising interest rates are making the utility sector a bit less attractive these days. Brian had plans to sell Brookfield Infrastructure Partners (BIP) because of this, but first he wanted to make sure the portfolio locked in a dividend payment. The record date was yesterday, so today he sold BIP for a 66% return.

For its replacement, the editor wanted to take advantage of strong construction spending in the economy. Therefore, he bought H&E Equipment Services (HEES), one of the country’s largest integrated equipment services companies. This Zacks Rank #1 (Strong Buy) beat the Zacks Consensus Estimates for both earnings and revenues in its most recent report. In addition, HEES should benefit from an infrastructure plan out of Washington. It pays an annual dividend yield of 2.9%. The full write-up has more on both of today’s moves.

TAZR Trader: So far, there’s been no regulatory backlash against Facebook (FB) regarding its part in alleged Russian interference with U.S. politics. Kevin sold this stock last month on such concerns and banked about 30%. Now he wants back in and added FB with a smaller-than-normal 5% allocation because he plans to buy more on any dips. Eventually, the editor expects this stock to reach $200 later this year. Kevin also added a 5% allocation in Direxion S&P 3X Bull ETF (SPXL) on Thursday. Learn more about today’s moves in the complete commentary.

Momentum Trader: It’s kind of a no-brainer for a momentum investor like Dave to pick up a steel stock after today’s tariff news. The editor went with a 12.5% allocation in good old US Steel (X). He thinks this should be more than a one-day story for the stock and wants to see how much momentum it has. Read the full write-up for more.

Insider Trader: A drug stock that’s pinning all its hopes on one treatment is a bit of a gamble, but Tracey is willing to take the risk with Aimmune Therapeutics (AIMT). This small-cap just received some good Phase 3 results for a potentially blockbuster peanut allergy treatment, while also doing a secondary to get enough cash to bring it to market. Insiders responded with a cluster buy, which included the CFO, a 10% owner and 3 directors. The editor sees this as a great sign that the insiders are confident moving forward, so she bought AIMT on Thursday with an allocation of about 8% after selling IBP. Read the full write-up for a lot more on this new addition.

ETF Investor: The highest consumer confidence reading in nearly 20 years convinced Neena to add some exposure to the consumer discretionary sector. The editor chose Consumer Discretionary Select Sector SPDR ETF (XLY), which includes Amazon, Home Depot, Comcast, Disney and Netflix among its top holdings. Not only is XLY the most popular ETF in the space, but it’s also one of the cheapest with an expense ratio of just 13 basis points. It also has a dividend yield of 1.14%. Read more about this new pick in the full write-up.

Home Run Investor: Immersion Corp. (IMMR) develops technologies that allow users to interact with computers using touch. The company reported a solid quarter recently, but what really caught Brian Bolan’s attention was its guidance. IMMR sees fiscal 2018 revenues between $80 million and $95 million, which was well over the Wall Street consensus at the time. The Zacks Consensus Estimate for this year has jumped in the past 7 days, though the stock is still a Zacks Rank #3 (Hold) for now. Get a lot more info about this new addition in the complete commentary.

Until Tomorrow,
Jim Giaquinto

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