Comey Crisis Averted

The James Comey testimony has come and gone…and Donald Trump is still President. The market didn't see any "bombshells" in today's event, so we were spared another May17th-like collapse. Actually, after bouncing around for much of the session, the major indices were able to finish on positive ground. It also helped that the ECB left interest rates unchanged and Theresa May looks set to win the election even if her party loses seats. So the market's big 3 concerns heading into Thursday's session all look to be duds.

The S&P finished with a slight 0.03% advance to 2433.8, while the Dow was up 0.04% to 21,182.5. The NASDAQ had an easier time than its counterparts with a 0.39% increase to 6321.8.

In the portfolios, Healthcare Innovators entered the diagnostics industry with its latest pick, while Kevin's other portfolio (TAZR Trader) had a double-digit performance. Otherwise, the portfolios were pretty quiet today as they waited to see what happened in Washington and Europe. The highlights section below has more on these moves, along with comments from other editors.

Today's Portfolio Highlights:

Healthcare Innovators: The portfolio made its first foray into the diagnostics industries on Thursday by picking up Accelerate Diagnostics AXDX, which provides microbiological testing technologies. Thanks to its proprietary Pheno System, net sales for AXDX have already soared to $530K in first quarter 2017 from $163K a year earlier. And next year it is expected to grow at least 500% to $70 million…though it will still not be profitable. Read Kevin's detailed write up on this new buy, and learn why it should be viewed as a "Richly Valued" aggressive growth stock.

TAZR Trader: Chinese e-commerce juggernaut Alibaba BABA finished Thursday's session at new all-time high after surging more than 13%. Investors were thrilled with its revenue growth guidance of between 45% and 49% for 2018, which is above expectations. Furthermore, BABA said it's very possible that gross merchandise volume could hit $1 Trillion by 2020. Thanks to this strong performance, TAZR Trader easily had the best performing stock from all the portfolios today.

Surprise Trader: "U.S. stocks were pretty flat in Thursday trading, though the Nasdaq continues to outperform and was led again by strength in the semiconductor space. The Comey testimony largely disappointed markets and wasn't a panic event by any stretch, allowing U.S. stocks to stay rangebound on what was a pretty low volume session.

"The Comey testimony turned out to be a total non-event today. Sure, it didn't sound great for President Trump, but it wasn't close to a bombshell disaster for the administration either. In other words, the status quo of Trump unable to find his footing—and distracted by other issues—looks to remain in play.

"While the status quo isn't a reason to get extremely bullish, it was at least enough to send safe havens lower across the board. Gold was lower by a percent, T-bill yields were on the rise, and the VIX was down by about 2%. Traders seem satisfied to give the political situation the benefit of the doubt for now, making Thursday a pretty uneventful session." -- Eric Dutram

Momentum Trader: "One great thing about the Comey testimony today was it helped set off a decent rally in the Trump Trade. You remember the Trump Trade right? Financials, industrials and all things domestically inclined. After the risk that Comey's testimony would shock the world subsided, traders loaded up on infrastructure plays.

"Good news is the Russell put in another fantastic performance today. But the bad news is the index still hasn't broken out from the top end of the consolidation range (see chart below). The Russell has been stuck in an 80 range since December. In late February and late April the index pushed above 1,400 only to stall out shy of 1,420. This could finally be the push the Russell needs to get to the next level.

"If it can break 1,420 soon it will join the large caps at their all-time highs. There is a distinction we need to make between the small caps and their larger counterparts. The large cap rally has been fueled by earnings where the move in the small caps here is more speculative. As long as small caps can deliver next quarter everything should be just fine. But if they inflate here and don't get the help they need from domestic reforms there could be a bit of a bubble happening." -- Dave Bartosiak
 

Until Tomorrow,
Jim Giaquinto