It's the Fed's Move Now

Stocks don’t seem too concerned about tomorrow’s Fed announcement after yet another positive session with all-time highs…but you can bet that they’ll be watching Chair Yellen’s comments closely. Once again, the Committee is not expected to raise rates during this meeting. However, there are many ways that they can move the markets, including with the plan to start reducing its $4.5 trillion portfolio. 

“Investors now turn their focus to the FOMC tomorrow. Pay attention to the language and what the fed might do with the balance sheet,” said Jeremy in Counterstrike . “Bond traders will try to anticipate if December will be the month we see the next rate hike, expect a big move in treasuries if the Fed hints at a definite hike.” 

Despite the upcoming news, the market kept rolling along on Tuesday. The Dow made its sixth straight all-time high with a gain of 0.18% to 22,370.8. The S&P closed above 2500 for the third consecutive session with an advance of 0.11% to 2506.7, marking its third straight all-time high. And the NASDAQ reached its own record by increasing 0.10% to 6461.3. In addition to the Fed, the market also had to contend with a tough speech from President Trump at the U.N. and a powerful earthquake in Mexico. 

In the portfolios, Large-Cap Trader banked a more than 40% gain and then immediately used the funds to bulk up three other positions. Dave Bartosiak added to both Momentum Trader and Home Run Investor , while Stocks Under $10 also got a new addition. Finally, Short List swapped out two positions in this week’s adjustment. See below for more specifics:

Today’s Portfolio Highlights:

Large-Cap Trader: Shares of European airline company International Consolidated Airlines (ICAGY) are moving higher today, which gives John the perfect opportunity to execute the moves he outlined yesterday. Namely, the editor is selling ICAGY for an impressive profit of 40.3%. Then he is dividing that cash equally into three parts to bulk up the portfolio’s existing positions in Micron Technology (MU), Lam Research (LRCX) and TE Connectivity (TEL). Read the full write-up for more on today’s moves. 

Momentum Trader: Dave considers Companhia Brasileria de Distribuicao (CBD) to be a “fantastic turnaround story”. The best part, though, is that this turnaround has been underway for a couple of years now, so investors can start taking advantage of it right now. Shares and earnings estimates for this Brazilian supermarket have been on the rise, especially after a HUGE 650% earnings surprise in its most recent quarterly report. The stock has made it past $25 and the editor believes it will continue to rally over the next several days. Don’t miss the full write-up for more. 

Stocks Under $10: In addition to a sizeable 50% positive surprise last month, Ballard Power Systems (BLDP) also has a 33% Earnings ESP for next quarter. Brian Bolan likes this PEM fuel cell systems company and thinks it has good growth prospects for the future. Several recent price targets are calling for this approximately $4.50 stock to reach $6, which the editor believes it will reach later this year or early next. Therefore, he bought BLDP for the portfolio on Tuesday. Learn more in the full commentary. 

Home Run Investor: The Equifax hack has everyone thinking about cyber security again. For his part, Dave decided to add Varonis Systems (VRNS), which provides an innovative software platform that allows enterprises to map, analyze, manage and migrate their unstructured data. The company is expected to grow revenue by 24.5% this year, which follows growth of 29.3% in 2016, 25.5% in 2015 and 35.8% in 2014. See the complete commentary for more on this new pick. 

Zacks Short List: This week, the portfolio short-covered Liberty Global (LBTYA) and GoDaddy Inc. (GDDY). It replaced these names by adding ConocoPhillips (COP) and Incyte Genomics (INCY). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.  

Options Trader: “The markets once again finished in the plus column today as traders await the FOMC Meeting Announcement on rates tomorrow. 

“While no rate hike is expected, there is plenty of speculation on when they will begin unwinding their balance sheet. 

“Either way, market watchers will be focusing intently on the exact words they use to describe their decision on rates, and what their economic forecast is going forward. 

“Nobody is expecting any surprises. But then again, if they did, it wouldn’t be a surprise would it?” — Kevin Matras 

All the Best, 
Jim Giaquinto

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