Courtesy of David Brown, Sabrient Systems and Gradient Analytics
Today, Thanksgiving week was greeted with a marginally up day by the markets with the NASDAQ reaching a new high of 4007 before falling back below 4000 to close up nearly 3 points at 3995.57. The S&P 500 reached a new all-time high at 1808.58 before ending the day down a little over 2 points at 1802.48. The generally positive attitude was brought about, at least partially, by the agreement from Iran to curb its nuclear program. Indeed, it is a small step with many pitfalls ahead during the next six months: Iran could abandon its efforts to construct nuclear weapons with full inspection rights or, at the worst, show no efforts to curb that progression. But combined with the Syrian acceptance to give up its chemical weapons, the agreement with Iran represents at least a mini-step for mankind to cease its violent methods of resolving disputes.
The rest of the week will probably be a rather lethargic market. There are a number of economic numbers released but very few new corporate earnings reports. Tomorrow’s Housing Start numbers have been postponed until December 18, due the government shutdown. They will release September, October and November numbers on that date. Oddly, New Building Permits, which are expected to improve, will be released. Case Schiller will also release its monthly home prices reports, so perhaps we will get a sense of what is happening in housing. Also, tomorrow, we will get what is expected to be an improved Consumer Confidence reading for November. On Wednesday, we will get Initial Jobless Claims and the Final Michigan Sentiment numbers for November. Both are expected to be improved. On the other hand, we also get November’s Chicago PMI and October’s Leading Economic Indicators, and both are expected to be worse than previous figures. It is unlikely anything but an enormous surprise, such as the Republicans and Democrats reaching agreement on any bill, is likely to move markets this week.
Finally, sectors, much as we expected, were led last week by Healthcare, Financials and Consumer Cyclicals in the top five. Energy was also there, but unlikely it’s to repeat due to some Iran oil starting to move. So, best stock shopping will probably be available in those three sectors over the next few weeks. Have a wonderful holiday and give thanks for the small steps that mankind has made in the past few weeks.
3 Stock Ideas for this Market
I selected the following stocks from a custom search looking for undervalued growth stocks with recent upward analyst revisions in MyStockFinder (*all data below from Yahoo! Finance):
United Continental Holdings, Inc. (UAL) –Industrials
- Trading 9x forward earnings estimates
- Analysts have revised earnings estimates up for next quarter in last 30 days
- 108% projected EPS growth for current quarter, 91.5% next year, 42.7% over the next 5 years
Jazz Pharmaceuticals PLC (JAZZ)—Healthcare
- Trading for 19x current earnings estimates and 14x forward earnings estimates
- Nearly all covering analysts have revised EPS estimates up in last 30 days
- 17% projected EPS growth for the current quarter, 24% next year, 23% over the next 5 years
Arris Enterprises Inc. (ARRS)—Technology
- Trading for 10x forward earnings estimates
- Nearly all covering analysts revised EPS estimates up in last 30 days
- 57% projected EPS growth for the current quarter, 26% next year, 38% over the next 5 years
