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Looking Past the Hike | The Mesh Report

Looking Past the Hike

Zacks Equity Research March 14, 2017 Comments Off on Looking Past the Hike
Well, here we are in the waiting room again, but this time we know the outcome. Odds of the Fed hiking rates on Wednesday are now at around 95%. The market has made peace with that outcome, but there's always room for worry. How many rate hikes will we get this year? That question will be the big focus after the meeting, and led to "one of the dullest days of the year" on Monday, according to Jeremy in Zacks Counterstrike.

The S&P spent most of the day in the red, but now has a rather unimpressive three-day winning streak with today’s gain of 0.04% to 2373.5. The Dow tried to get back to the positive side, but it ran out of time and finished with a loss of 0.10% to 20,881.5. However, the NASDAQ stayed above ground for the entire session and ended with a gain of 0.24% to 5875.8. Don't be surprised if we get an equally lackluster session tomorrow as the Fed meeting begins.

Today's Portfolio Highlights:

Zacks Counterstrike: The sell-off in crude oil has opened opportunities in some higher quality energy stocks, which is what Jeremy capitalized on today with a 10% allocation in Pioneer Natural Resources (PXD). This Zacks Rank #1 oil and gas E&P company beat on both the top and bottom lines in its most recent quarter, yet it’s given back those post earnings gains. So it’s fertile ground for a Counterstrike.

But that wasn’t all. The editor decided to make a rare buy on weakness with a 5% position in Oclaro (OCLR), the provider of optical components to the telecom market. It fell victim to a big sell-off last week due to a poor earnings report from a counterpart. So the portfolio is getting a good price for this Zacks Rank #2, which also has a Zacks VGM Score of A and is part of a space in the top 14% of the Zacks Industry Rank. Read the complete write-up for a lot more on both of today’s additions.

TAZR Trader: The portfolio has a high concentration of chip stocks, so Kevin decided to sell two of them on Monday after generating solid profits in a short period of time. He got out of Applied Materials (AMAT) with an approximately 13% return in less than two months, along with Lam Research (LRCX) with about a 7% profit in less than one month. These timely buys did what they were supposed to do, and now the portfolio is cutting ties with the market at risk of correcting back to 2325 in the wake of the upcoming Fed hike.

Zacks Confidential: What would you say if someone told you that the market would double again in the next few years? It seems far-fetched given the age of this bull run, but that’s exactly what Kevin Matras thinks is going to happen. Steve admits that it sounds “a bit aggressive” at first blush, so he asked Kevin to state his case in this week’s Zacks Confidential. Read his well-reasoned argument for such a bullish scenario, and get 3 stocks that will help you get positioned for record gains: The S&P Will Double Within the Next 5 Years.

Black Box Trader: The portfolio sold three profitable positions in this week’s adjustment: Unum Group (UNM, +6.6%), Allstate Group (ALL, +5.6%) and Louisiana-Pacific (LPX, +1.8%). The new additions replacing these names are CBRE Group (CBG), Scientific Games (SGMS) and Weight Watchers (WTW). Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Reitmeister Trading Alert: "The Fed meeting announcement is quickly approaching on Wednesday 3/15 @ 2pm ET. With the rate hike in the bag, then what matters is the pace of future hikes. Still planning just 3 hikes this year? Or is there reason to speed it up even more?

"The more aggressive the Fed sounds, the more stock investors will bristle. However, if they stay with the slow and steady 3 hike per year mentality, then there should be very little reaction to this announcement." -- Steve Reitmeister

All the Best,
Jim Giaquinto

Before You Go...

• Remember, the first episode of the brand-new Zacks Ultimate Strategy Session will be available for viewing on Wednesday, March 15th. Steve Reitmeister and Kevin Matras will cover the investment landscape from most every angle in this "must-see-TV" event. Of course that includes a rundown of what has just happened in the market and how you can best prepare for what lies ahead. Don't miss your chance to hear their Agree to Disagree segment, Steve's answers to your questions in Reity's Mailbag, tips for improving your portfolio and more. So be sure to mark your calendars then login to Zacks.com and bookmark this page.

• Attention aggressive investors: the new "5 Stocks Set to Double" report is ready to be downloaded! Five of Zacks' strategists each hand-picked a stock with unique qualities that are set for enormous gains in 2017. Each one of them are from different sectors and have passed the scrutiny of our Zacks Rank criteria. These picks are for those looking to generate returns of 100% or more in the months ahead. Learn about the picks and the reasoning behind them by logging in to Zacks.com then clicking: 5 Stocks Set to Double.

Recommendations from Zacks' Private Portfolios:

Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >> Zacks Investment Research


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