Tag Archives: MSFT

Is Advanced Micro Devices, Inc. Stock a Screaming Buy Thanks to Intel?

Advanced Micro Devices, Inc. (NASDAQ:AMD) had a rather disappointing year in 2017. AMD stock fell more than 9% over those 12 months. Long-term investors shouldn’t be too deterred though, assuming they caught the near-300% rally in 2016. And after the down year, AMD stock taken off, already climbing almost 16% in the early days of 2018

Depending on how serious a flaw there is with Intel Corporation (NASDAQ:INTC), it could open a window for AMD and that would allow the recent momentum in AMD stock to continue. So what’s the skinny?

Essentially, there was a security flaw in Intel chips. The bugs, known as Meltdown and Spectre, effect everything from Apple Inc. (NASDAQ:AAPL) iPhones to Alphabet Inc (NASDAQ:GOOGL) and its Google Chrome browser. The issue also had an impact on Google Android devices, Microsoft Corporation (NASDAQ:MSFT) Windows and even the data center services for Amazon.com, Inc. (NASDAQ:AMZN).

For AMD’s part, the company said that there’s a “near zero risk” for its chips as a result of Intel’s security flaw. From an investment standpoint, shares of INTC have been falling while AMD has been rallying on the theory that, going forward, AMD chips will be the more attractive option.

Not a Zero Sum Industry

As much as I want that to be the case for AMD, I don’t know that it will be the end result. Although admittedly, this certainly doesn’t hurt Advanced Micro Devices stock. Patches are being put in place by MSFT, AMZN, GOOGL, AAPL and INTC. Many have already been put into action and the companies say customers remain safe at the moment despite the vulnerability, so long as they update their products. The concern for AMD stock is whether this news justifies a 16% rally in the stock.

Should it not impact INTC’s long-standing relationships or hurt sales, then there won’t be any real impact on AMD’s business. It’s even possible that it will push buyers away from INTC and over to Nvidia Corporation (NASDAQ:NVDA) rather than AMD. This isn’t a zero-sum industry, nor is this a zero-sum event.

We’ll see how it turns out.

Coming Soon: A Viable Business

We don’t know how much of an impact this INTC news will have on AMD stock. We don’t know if it will have any impact at all. But that doesn’t mean there isn’t reason to like Advanced Micro Devices stock nevertheless.

Granted, with shares now trading about a dime below $12, AMD was more attractive a month ago near $10. That has been the theme, though. Buy on sharp pullbacks and sell on rallies. Until AMD stock breaks out (more on that in a minute) we have to stick with the trading ranges we have.

But AMD stock is more than just a trading vehicle. For investors who can look beyond the next one to three months, there’s a really viable business here. The company remains well-positioned in key growth markets. Ranging from video games to graphic chips, vehicles and the cloud. While many view Nvidia as the top chip, AMD isn’t a bad alternative.

Besides, business is coming along as well. After years of losses, Advanced Micro is looking to turn a profit in 2017. While analysts forecast just 13 cents per share in earnings for fiscal year 2017, that’s up almost 200% year-over-year. They further expect 177% growth in 2018. Revenue growth of 23% in 2017 is forecast to slow to just 12.3% in 2018.

The positive here is that profitability is expanding much faster than revenue, meaning margins are moving in the right direction. If AMD can turn cash flow positive, I think shares can really start to gain some upside momentum. That should be the case as revenues churn higher and profitability explodes.

It helps that between the three — NVDA, AMD and INTC — Advanced has the lowest sales-based valuation.

Trading AMD Stock

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Since we don’t know the full impact of INTC, AMD stock could have limited upside in the short term. The 200-day moving average near $12.40 is acting as resistance. Should it give way, $13 and above becomes the new target. But given the recent rally and current resistance, investors should be more prudent.

Either wait for a breakout and close over the 200-day moving average or look for a pullback down toward $11. I am hoping for the latter, as I’d like a lower cost basis on a longer-term position.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.

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The Little-Known Stock That's Becoming A Powerhouse

It’s no secret that businesses want your e-mail. It’s the holy grail of marketing today — especially for every fly-by-night outfit advertising on social media. You see, if a business can get your e-mail, they can begin an almost scientific process of turning you into a paying customer.

They do this by offering some free report or trial offer. And once you take the bait and provide your e-mail, they enter your e-mail address into a sales funnel. Here, they automatically send you an e-mail every few days trying to get you to read or listen to a long sales letter.

This sales letter is an attempt to sell you a high-priced product or service. And the process couldn’t be easier. The business offers their product or service, and then at the end of the pitch, they offer a bunch of freebies to sweeten the deal.

You know the process. “Buy my $100 book and you’ll get five BONUS reports giving you secrets that only my customers know.” And believe it or not, this funnel system works.

In fact, research shows that once an e-mail address is entered into a sales funnel, it takes roughly 45 days to make that person a paying customer. Moreover, 42% of those people were actually convinced to purchase just on the desire to get the BONUS reports.

The funnel system works so well, I’m going to use it today to describe my favorite investing strategy — buying into a long-term mega-trend. This is the method I used to invest in Nvidia (Nasdaq: NVDA) back in 2014 at less than $20 a share. It’s the same method investors used to buy Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL) decades ago, too.

And it’s the reason the South African company Naspers (OTC: NPSNY) is on my radar. The company is a global provider of internet and e-commerce, video-entertainment, and print media services. The company has a market cap of just under $120 billion.

But there is something the company’s market cap does not accurately portray. Naspers was an original investor in Chinese investment holding company Tencent Holdings (OTC: TCEHY) 15 years ago. Today, Tencent is worth roughly $500 billion.

And guess who still owns 34% of Tencent? That’s right, Naspers.

Naspers’ original $34 million investment is now worth nearly $170 billion, in what has to be one of the most profitable investments in history. And Naspers has no intention of selling its stake in Tencent anytime soon.

Why is this so important?

That’s easy. Naspers’ market value is $120 billion. But their stake in Tencent is worth nearly $170 billion. That means that Naspers is currently trading at a $50 billion discount to just its stake in Tencent alone.

In other words, even if Naspers’ other ventures were to do nothing from here, the company still has a stake in Tencent greater than the market cap of Naspers. This means that if the company were to be liquidated today at fire sale prices, Naspers investors still come out $50 billion ahead. Not a bad deal.

But wait, there’s more…

If you buy Naspers today, you’re getting shares valued at a discount to just one of Naspers’ holdings. That’s a deal worth $50 billion — more than worth the price of admission.

But let’s sweeten the deal. Not only will you get the company at a discount, but you get several BONUS companies, too.

You see, Naspers has an incredible global empire.

And the value of those companies is conservatively valued at between $30 and $40 billion. They include online-classified ad businesses, E-commerce businesses, food delivery, and video entertainment companies, as well.

In fact, Naspers has quietly become the global leader in online classified ads. The company leads its competitors in 35 markets and is the top-ranked provider in the United States, India, Indonesia, and Brazil.

Naspers also owns Flipkart, the leading e-commerce provider in the world’s second most populated country, India. Indian programmers designed Flipkart, which means the company understands its customers better than anyone else does. That’s why the company holds an incredible 57% market share in India, yet still expects to grow its business by 160% by 2022.

The Naspers umbrella also includes PayU, the Indian version of PayPal. PayU processes more than 1.2 million payments daily. This will grow exponentially in the next few years, as India will become the world’s third-largest economy by 2025.

Naspers owns MakeMyTrip, an online travel booking company, and redBus, India’s leading bus ticket provider. Naspers also owns food delivery companies Swiggy and iFood, and has a stake in Delivery Hero worth about $2 billion. Delivery Hero is the market leader in food delivery in 36 of the 42 countries in which it operates.

All told, even if these other companies do nothing for the next five years (which is almost impossible), Naspers is worth about $80 – $90 billion more than its market cap. In other words, by purchasing Naspers stock today at a 30% discount to Tencent’s value, you get all these other business for FREE, giving us a total deal worth roughly $200 billion.

But you have to act fast. This deal won’t last long at these prices. Operators are standing by…

Risks To Consider: Many of Naspers businesses are in developmental stages, meaning they are not yet producing revenue. Should another global financial crisis materialize, Naspers growth prospects would be severely hurt — despite the relative safety of its Tencent holdings.

Action To Take: Buy shares of Naspers up to $60 per share. Mitigate your risk by limiting your purchase to a maximum of 5% of your portfolio. Use a 25% trailing stop-loss to protect your capital. Naspers is a growth company, and as such is recommended only for investors with a time horizon of more than 5 years.

Editor’s Note: “Solar glass” that absorbs endless free energy from the sun… A “skin gun” that uses stem cells to heal burn victims in days. Plus 11 more investment predictions. Get tickers here, free.

3 Simple Ways to Profit from California’s Legal Cannabis Market

Thousands are lining up at the doors…

California's Legal Cannabismoneymorning.com/wp-content/blogs.dir/1/files/2018/01/marijuana-smaller-150×150.jpg 150w, moneymorning.com/wp-content/blogs.dir/1/files/2018/01/marijuana-smaller-100×100.jpg 100w, moneymorning.com/wp-content/blogs.dir/1/files/2018/01/marijuana-smaller-75×75.jpg 75w, moneymorning.com/wp-content/blogs.dir/1/files/2018/01/marijuana-smaller-50×50.jpg 50w, moneymorning.com/wp-content/blogs.dir/1/files/2018/01/marijuana-smaller-270×270.jpg 270w” sizes=”(max-width: 300px) 100vw, 300px” title=”California’s Legal Cannabis” />

Businesses are expecting a watershed year for profits…

And marijuana investors are absolutely jubilant.

Why? Because the state of California just officially legalized cannabis yesterday (Jan. 1).

Don’t worry – it’s not too late to profit from California’s legal cannabis market.

In fact, we’ve identified three investments that are likely to benefit from the Golden State’s cannabis revolution.

And at the end of this article, you can find out how to get our 89-page “bible of weed investing,” The Roadmap to Marijuana Millions. For a limited time, we’re giving away the details for free.

Read on…

California “Pot Play” No. 1: Microsoft Corp.

Money Morning Director of Technology & Venture Capital Research Michael A. Robinson has long recommended tech industry leader Microsoft Corp. (Nasdaq: MSFT) as a “starter” pot stock.

Not only is Michael our Director of Technology and Research, but he’s also our pot stock expert – and for good reason.

This time last year, Michael published his first “weed investors’ bible.” At the time, it was packed with 30 of his absolute favorite plays in the still-booming legal cannabis sector.

Editor’s Note: Go here to find out how to reserve your copy of Michael’s latest “weed investors’ bible” today…

Over the past year, this section of his Nova-X Report portfolio has seen 10 double-digit winners and eight triple-digit winners… 291% gains… 193.3%… 189.5%; one recommendation even saw peak gains of 1,588%.

So when Michael says something is a top-notch marijuana play that should be in every portfolio, we listen.

Most think of Microsoft as solely a technology company – and it is. However, the Fortune 500 tech giant also has its hands in the marijuana industry.

Over the past few years, Microsoft has made a huge shift toward developing legal marijuana compliance software that governments and businesses can’t operate without – making it a new leader in the legal cannabis space.

“Microsoft is working… to make available to state and local governments the software they need to develop ways to track compliance,” Michael told his readers on Oct. 18. “Strict compliance is a way to make legal weed safe for consumers in a regulated marketplace and palatable to ‘law-and-order’ types in governments and legislatures.”

The software it has created will allow governments and entrepreneurs to monitor the distribution of cannabis “from seed to sale” and ensure compliance along the way.

But this move from Microsoft is about much more than keeping cannabis companies on the straight and narrow.

“In one swoop, Microsoft has done nothing less than legitimize the cannabis trade in the eyes of many,” said Michael.

“The company will begin by marketing the software to government employees, but hasn’t ruled out marketing through dedicated cannabis events,” Michael added. “The Microsoft logo flying proudly at a conference packed with marijuana growers and distributors would be a huge leap forward for the industry.”

Microsoft gets you low-risk entry into the legal cannabis sector and a respectable 2.00% dividend yield. Plus, it has a VQ Score of 3.

“This is one to buy now and build out on dips,” says Michael.

California “Pot Play” No. 2: Scotts Miracle-Gro Co.

Scotts Miracle-Gro Co. (NYSE: SMG) has been a staple in our pot stock portfolio since 2016 – but we’re ramping up our recommendation in the new year.

It’s already poised for a 15% sales surge in 2018, but California’s legalization just set it up for a serious new catalyst.

Never Miss a Single Marijuana Industry Update Again: Get real-time alerts sent directly to your inbox, completely free, here.

You see, Scotts is not just a worldwide leader in lawn and gardening care, it’s also a worldwide leader in hydroponics equipment.

Hydroponics is the method of growing plants without soil by using mineral nutrient solutions in a water solvent – a popular and highly effective way of growing cannabis, especially in densely populated areas.

Hydroponic systems only require about 10% of the water needed to produce the same volume of plants as conventional methods, according to Farmers Weekly, making it the ideal way to save water.

California’s new legalization came with a caveat for cannabis growers: new water regulations.

These new laws will force cannabis companies to completely rethink and rework the way they grow their plants.

For California companies looking to comply with the latest regulations, turning to hydroponics will be a no-brainer. And with a $565 million stake in the industry, Scotts Miracle-Gro should see a huge boost in sales on top of an already excellent year for the company.

Make no mistake: A surge in sales revenue will easily translate to gains in the stock price. You definitely want to own shares of SMG now because you may not see them at a better price.

California “Pot Play” No. 3: ETFMG Alternative Harvest ETF

The ETFMG Alternative Harvest ETF (NYSE Arca: MJX) is the first New York Stock Exchange-listed marijuana ETF.

It just went live last week, so you can still benefit from first-mover advantage.

This ETF was previously targeted toward Latin American real estate, but recently shifted to include 30 different national and international companies involved in the legal cannabis space.

Some companies in this basket of stocks, like SMG, are “pick-and-shovel” plays that allow you to invest indirectly in the industry.

Others, like cannabis biotech firm Insys Therapeutics Inc. (Nasdaq: INSY), are direct plays in marijuana businesses that offer investors the opportunity for incredibly fast gains.

Indeed, over the past week, MJX has gained 13.45%.

Many of the companies in this ETF are ones we’ve been recommending for years. And while MJX is a nice way to grab a huge chunk of the marijuana industry in one go, we don’t see it moving nearly as fast as some of the individual companies Michael has shown readers.

To get access to Michael’s model pot portfolio, read on…

Gain Access to 30 of the Best Pot Stocks of 2018

After nine months of exhaustive research, Michael and his team found the best, most lucrative, and fastest-growing legal pot stocks in America.

They’re all in the updated 89-page “bible of weed investing,” The Roadmap to Marijuana Millions: Phase II. And for a limited time you can get all the details for free.

Go here to find out how to reserve your copy today…

Follow Money Morning on Twitter@moneymorning,Facebook, and LinkedIn.

Join the conversation. Click here to jump to comments…

The Little-Known Stock That's Becoming A Powerhouse

It’s no secret that businesses want your e-mail. It’s the holy grail of marketing today — especially for every fly-by-night outfit advertising on social media. You see, if a business can get your e-mail, they can begin an almost scientific process of turning you into a paying customer.

They do this by offering some free report or trial offer. And once you take the bait and provide your e-mail, they enter your e-mail address into a sales funnel. Here, they automatically send you an e-mail every few days trying to get you to read or listen to a long sales letter.

This sales letter is an attempt to sell you a high-priced product or service. And the process couldn’t be easier. The business offers their product or service, and then at the end of the pitch, they offer a bunch of freebies to sweeten the deal.

You know the process. “Buy my $100 book and you’ll get five BONUS reports giving you secrets that only my customers know.” And believe it or not, this funnel system works.

In fact, research shows that once an e-mail address is entered into a sales funnel, it takes roughly 45 days to make that person a paying customer. Moreover, 42% of those people were actually convinced to purchase just on the desire to get the BONUS reports.

The funnel system works so well, I’m going to use it today to describe my favorite investing strategy — buying into a long-term mega-trend. This is the method I used to invest in Nvidia (Nasdaq: NVDA) back in 2014 at less than $20 a share. It’s the same method investors used to buy Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL) decades ago, too.

And it’s the reason the South African company Naspers (OTC: NPSNY) is on my radar. The company is a global provider of internet and e-commerce, video-entertainment, and print media services. The company has a market cap of just under $120 billion.

But there is something the company’s market cap does not accurately portray. Naspers was an original investor in Chinese investment holding company Tencent Holdings (OTC: TCEHY) 15 years ago. Today, Tencent is worth roughly $500 billion.

And guess who still owns 34% of Tencent? That’s right, Naspers.

Naspers’ original $34 million investment is now worth nearly $170 billion, in what has to be one of the most profitable investments in history. And Naspers has no intention of selling its stake in Tencent anytime soon.

Why is this so important?

That’s easy. Naspers’ market value is $120 billion. But their stake in Tencent is worth nearly $170 billion. That means that Naspers is currently trading at a $50 billion discount to just its stake in Tencent alone.

In other words, even if Naspers’ other ventures were to do nothing from here, the company still has a stake in Tencent greater than the market cap of Naspers. This means that if the company were to be liquidated today at fire sale prices, Naspers investors still come out $50 billion ahead. Not a bad deal.

But wait, there’s more…

If you buy Naspers today, you’re getting shares valued at a discount to just one of Naspers’ holdings. That’s a deal worth $50 billion — more than worth the price of admission.

But let’s sweeten the deal. Not only will you get the company at a discount, but you get several BONUS companies, too.

You see, Naspers has an incredible global empire.

And the value of those companies is conservatively valued at between $30 and $40 billion. They include online-classified ad businesses, E-commerce businesses, food delivery, and video entertainment companies, as well.

In fact, Naspers has quietly become the global leader in online classified ads. The company leads its competitors in 35 markets and is the top-ranked provider in the United States, India, Indonesia, and Brazil.

Naspers also owns Flipkart, the leading e-commerce provider in the world’s second most populated country, India. Indian programmers designed Flipkart, which means the company understands its customers better than anyone else does. That’s why the company holds an incredible 57% market share in India, yet still expects to grow its business by 160% by 2022.

The Naspers umbrella also includes PayU, the Indian version of PayPal. PayU processes more than 1.2 million payments daily. This will grow exponentially in the next few years, as India will become the world’s third-largest economy by 2025.

Naspers owns MakeMyTrip, an online travel booking company, and redBus, India’s leading bus ticket provider. Naspers also owns food delivery companies Swiggy and iFood, and has a stake in Delivery Hero worth about $2 billion. Delivery Hero is the market leader in food delivery in 36 of the 42 countries in which it operates.

All told, even if these other companies do nothing for the next five years (which is almost impossible), Naspers is worth about $80 – $90 billion more than its market cap. In other words, by purchasing Naspers stock today at a 30% discount to Tencent’s value, you get all these other business for FREE, giving us a total deal worth roughly $200 billion.

But you have to act fast. This deal won’t last long at these prices. Operators are standing by…

Risks To Consider: Many of Naspers businesses are in developmental stages, meaning they are not yet producing revenue. Should another global financial crisis materialize, Naspers growth prospects would be severely hurt — despite the relative safety of its Tencent holdings.

Action To Take: Buy shares of Naspers up to $60 per share. Mitigate your risk by limiting your purchase to a maximum of 5% of your portfolio. Use a 25% trailing stop-loss to protect your capital. Naspers is a growth company, and as such is recommended only for investors with a time horizon of more than 5 years.

Editor’s Note: “Solar glass” that absorbs endless free energy from the sun… A “skin gun” that uses stem cells to heal burn victims in days. Plus 11 more investment predictions. Get tickers here, free.

Top 5 Tech Stocks To Invest In 2018

Hey, Alexa, can anything stop Amazon?

Shares of the e-commerce king, which is also now a cloud computing giant, connected-home leader, drone company, freight airline, Hollywood studio and even a traditional brick-and-mortar retailer, rose above $900 for the first time Tuesday.

It’s another all-time high.

Amazon (AMZN, Tech30) stock is on a seven-day winning streak. The shares have gained 7% during that stretch and more than 20% this year.

As a result, Amazon is worth more than $430 billion. That’s nearly twice the market value of its rival Walmart (WMT), which has a market cap of a mere $220 billion.

Only Apple (AAPL, Tech30), Google owner Alphabet (GOOGL, Tech30) and Microsoft (MSFT, Tech30) are worth more than Amazon. The Jeff Bezos-led company is now more valuable than Facebook (FB, Tech30) and Warren Buffett’s Berkshire Hathaway (BRKB).

And with that $900 stock price, Amazon is approaching some rarefied air.

Top 5 Tech Stocks To Invest In 2018: Cognizant Technology Solutions Corporation(CTSH)

Advisors’ Opinion:

  • [By Monica Gerson]

    Analysts expect Cognizant Technology Solutions Corp (NASDAQ: CTSH) to report its quarterly earnings at $0.79 per share on revenue of $3.23 billion. Cognizant Technology shares gained 1.75 percent to $58.60 in after-hours trading.

  • [By Shanthi Rexaline]

    The industry — valued at over $150 billion and comprising companies such as Wipro Limited (ADR) (NYSE: WIT), Cognizant Technology Solutions Corp (NASDAQ: CTSH), Infosys Ltd ADR (NYSE: INFY) and Tata Consultancy Services — has thus far been competing effectively on certain unique selling propositions such as low-cost technology skills and high quality manpower.

  • [By Monica Gerson]

    Cognizant Technology Solutions Corp (NASDAQ: CTSH) is estimated to report its quarterly earnings at $0.79 per share on revenue of $3.23 billion.

    CIGNA Corporation (NYSE: CI) is projected to report its quarterly earnings at $2.15 per share on revenue of $10.00 billion.

  • [By Lee Jackson]

    Cognizant Technology Solutions Corp. (NASDAQ: CTSH) is starting to show up as a stock to buy for many of the Wall Street firms we cover. The company was very bullish at the conference and cited a very solid demand environment that is expected to continue through next year. The Deutsche Bank target for the stock is placed at $92, while the consensus number is at $87.

  • [By WWW.THESTREET.COM]

    And Elliott could be pressuring two public companies to combine. One company that analysts contend could be interested in buying Advisory Board’s healthcare business, which represents about 80% of the company, is Cognizant Technology Solutions (CTSH) . The Teaneck, N.J.-based business has been under pressure in recent months by Elliott Management to take on more leverage to help fund research and M&A. 

Top 5 Tech Stocks To Invest In 2018: Microsoft Corporation(MSFT)

Advisors’ Opinion:

  • [By Douglas A. McIntyre]

    One of the notable things about the mall is the number of troubled retailers it houses. Long term, this may be bad for the mall’s finances. Macy’s, Abercrombie & Fitch Co. (NYSE: ANF), GameStop Corp. (NYSE: GME) and Gap Inc. (NYSE: GPS) have locations. However, Mall of America has buttressed its tenant list with scores of restaurants and with retailers like Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT) and T-Mobile US Inc. (NASDAQ: TMUS), which have very well-financed parents.

  • [By Giulio Prisco]

    One year ago, Amigobulls coveredabout the research arm of Microsoft (NSDQ:MSFT), Microsoft Research, as a top-class research organization that, among other pursuits, is exploring quantum computing.

  • [By Shudeep Chandrasekhar]

    Microsoft (NSDQ:MSFT)is trading at all-time highs after rallying nearly 20% in the last twelve months. Thanks to robust growth and high expectations from Microsofts strongly growing cloud business, Microsoft has truly transformed itself, as well the market sentiment along with it. But there are several crucial factors at play which are bound to cement Microsofts position near the top of the tech industry for the next few decades. Here are 3 strengths of Microsoft which suggest MSFT stock is one you should not miss out on.

Top 5 Tech Stocks To Invest In 2018: Castlight Health, inc.(CSLT)

Advisors’ Opinion:

  • [By Todd Campbell]

    Castlight Health (NYSE:CSLT)share price climbed 13.2% Wednesday after an SEC filing revealed that Maverick Capital had significantly boosted its stake in the company to 10.6%.

Top 5 Tech Stocks To Invest In 2018: Netlist, Inc.(NLST)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Friday, our Elite Opportunity Pronewsletter suggested small cap data/memory solutions stocksNetlist, Inc (NASDAQ: NLST) as a long/bullish position for our short term portfolio:

Top 5 Tech Stocks To Invest In 2018: Sohu.com Inc.(SOHU)

Advisors’ Opinion:

  • [By Roberto Pedone]

    Sohu.com (SOHU) is a Chinese online media, search, gaming, community and mobile service group. This stock closed up 7.5% to $69.61 in Monday’s trading session.

    Monday’s Volume: 4.90 million

    Three-Month Average Volume: 1.01 million

    Volume % Change: 351%

    From a technical perspective, SOHU ripped sharply higher here with heavy upside volume. This move pushed shares of SOHU into breakout territory, since the stock took out some near-term overhead resistance at $67.80. Shares of SOHU are now quickly moving within range of triggering another breakout trade. That trade will hit if SOHU manages to take out Monday’s high of $69.71 to its 52-week high at $70.63 with high volume.

    Traders should now look for long-biased trades in SOHU as long as it’s trending above Monday’s low of $66.95 or above that first breakout level of $67.80 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.01 million shares. If that breakout hits soon, then SOHU will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $75 to $80.

  • [By Wayne Duggan]

    Sogou is Baidu’s biggest rival when it comes to mobile search engine market share. The app is owned by Sohu.com Inc (NASDAQ: SOHU), and its position as second fiddle to Baidu makes it most similar to Microsoft Corporation (NASDAQ: MSFT)’s Bing.

  • [By Belinda Cao]

    Sohu.com Inc. (SOHU), which sold a stake in its search unit to Tencent Holdings Ltd. (700), advanced 11 percent for the week to $72.06. It retreated 5.9 percent Sept. 20. Tencent, Chinas biggest Internet company by market value, paid $448 million for a 36.5 percent stake in Sohus Sogou unit last week and merge its own search service with Sogou.

  • [By Monica Gerson]

    Sohu.com Inc (NASDAQ: SOHU) is projected to report a quarterly loss at $0.57 per share on revenue of $406.50 million.

    Bank of Hawaii Corporation (NYSE: BOH) is expected to report its quarterly earnings at $0.99 per share on revenue of $149.88 million.

  • [By Lisa Levin]

    Sohu.com Inc (NASDAQ: SOHU) shares were also up, gaining 14 percent to $57.89. Sohu.com reported a Q2 loss of $1.85 per share on revenue of $461.168 million.

Stocks Decline on Tax Cut Fatigue

U.S. equities moved lower on Tuesday as investors grew tired of the constant headlines concerning the GOP’s tax cut plans. And besides, much of the speculative excitement has shifted over to cryptocurrencies, with Bitcoin sliding hard after the close in what looks like the start of a prolonged pullback.

In the end, the Dow Jones Industrial lost 0.2%, the S&P 500 lost 0.3%, the Nasdaq Composite lost 0.4% and the Russell 2000 lost 0.8%. Treasury bonds were under pressure, the dollar weakened, gold lost 0.1% and crude oil gained 0.6%.

stocksinvestorplace.com/wp-content/uploads/2017/12/INDU121917-300×184.jpg 300w, investorplace.com/wp-content/uploads/2017/12/INDU121917-768×470.jpg 768w, investorplace.com/wp-content/uploads/2017/12/INDU121917-1024×627.jpg 1024w, investorplace.com/wp-content/uploads/2017/12/INDU121917-49×30.jpg 49w, investorplace.com/wp-content/uploads/2017/12/INDU121917-200×122.jpg 200w, investorplace.com/wp-content/uploads/2017/12/INDU121917-400×245.jpg 400w, investorplace.com/wp-content/uploads/2017/12/INDU121917-116×71.jpg 116w, investorplace.com/wp-content/uploads/2017/12/INDU121917-100×61.jpg 100w, investorplace.com/wp-content/uploads/2017/12/INDU121917-82×50.jpg 82w,https://investorplace.com/wp-content/uploads/2017/12/INDU121917-78×48.jpg 78w, investorplace.com/wp-content/uploads/2017/12/INDU121917-800×490.jpg 800w, investorplace.com/wp-content/uploads/2017/12/INDU121917-170×104.jpg 170w” sizes=”(max-width: 1083px) 100vw, 1083px” />

Breadth was mixed, with decliners outpacing advancers by a 1.6 to 1. Defensive consumer staples led the way with a 0.2% gain, while yield-sensitive real estate investment trusts and utilities were the laggards, down 1.9% and 1.8%, respectively.

Darden Restaurants, Inc. (NYSE:DRI) gained 6.8% after reporting better-than-expected quarterly results amid a difficult industry backdrop thanks to positive traffic trends at its Olive Garden and LongHorn restaurants. Apple Inc. (NASDAQ:AAPL) fell 1.1% on a downgrade from Nomura analysts on a belief the iPhone X lift is fading and that the coming tax cut bill isn’t a significant boost to stocks like AAPL.

On the economic front, housing starts increased 3.3% to the second-highest in 10 years, with single-family homes showing the best performance in more than a decade.

Turning to the tax bill, the legislation passed the House by a 227-203 margin and moves to the Senate, where a vote is expected sometime later tonight. The passage is expected to be relatively drama free. A “sell-the-news” dynamic is setting in now, with the WSJ reporting that the tax plan could actually hit the foreign profits of giant tech stocks like Microsoft Corporation (NASDAQ:MSFT).

The House is reportedly planning to vote on the bill a second time tomorrow morning in order to comply with parliamentary rules.

Conclusion

JNKinvestorplace.com/wp-content/uploads/2017/12/JNK121917-300×184.jpg 300w, investorplace.com/wp-content/uploads/2017/12/JNK121917-768×470.jpg 768w, investorplace.com/wp-content/uploads/2017/12/JNK121917-1024×627.jpg 1024w, investorplace.com/wp-content/uploads/2017/12/JNK121917-49×30.jpg 49w, investorplace.com/wp-content/uploads/2017/12/JNK121917-200×122.jpg 200w, investorplace.com/wp-content/uploads/2017/12/JNK121917-400×245.jpg 400w, investorplace.com/wp-content/uploads/2017/12/JNK121917-116×71.jpg 116w, investorplace.com/wp-content/uploads/2017/12/JNK121917-100×61.jpg 100w, investorplace.com/wp-content/uploads/2017/12/JNK121917-82×50.jpg 82w,https://investorplace.com/wp-content/uploads/2017/12/JNK121917-78×48.jpg 78w, investorplace.com/wp-content/uploads/2017/12/JNK121917-800×490.jpg 800w, investorplace.com/wp-content/uploads/2017/12/JNK121917-170×104.jpg 170w” sizes=”(max-width: 1083px) 100vw, 1083px” />

Keep a close eye on high-yield bonds, which I believe will the be catalyst for a nasty downturn in January. The GOP tax bill is highly stimulative at a time when the economy and the job market are operating at new full potential.

Not only will it boost inflation, but it will force the Federal Reserve to tighten policy more aggressively.

Bond market weakness and higher default expectations will spill into equities as well.

Today’s Trading Landscape:

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.

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Mondays Vital Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corpor

U.S. stock futures are in rally mode this morning, with Dow Jones Industrial Average futures up more than 100 points in premarket trading. Tax plan optimism is the big driver heading into the week before the holiday break, as Republican’s now appear to have the votes to pass the much anticipated legislation.

stock market todaySpecifically, Treasury Secretary Steven Mnuchin said over the weekend that he has no doubt that the Republican tax plan will make it to the president’s desk this week, after Senators Bob Corker (R-Tenn.) and Marco Rubio (R-Fl.) ended their holdouts and said they’d support the bill.

Against this backdrop, Dow futures have soared 0.64%, S&P 500 futures have climbed 0.37% and Nasdaq-100 futures have jumped 0.37%.

On the options front, volume was over the top on Friday, with more than 24.2 million calls and 17.7 million puts changing hands on the session. Traders, it appears, are already preparing to go on break as the holiday season draws to a close. As for the CBOE, the single-session equity put/call volume ratio rose to 0.57, while the 10-day moving average ticked higher to 0.59.

Turning to Friday’s options activity, Teva Pharmaceutical Industries Ltd (ADR) (NASDAQ:TEVA) was upgraded at Credit Suisse for announcing layoffs, but Israel’s largest labor union effectively shut the country down for half a day in protest. Elsewhere, Oracle Corporation (NASDAQ:ORCL) drew mixed options activity after a poorly received quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) rallied following a bullish note on GPU makers and cryptocurrencies.

Monday’s Vital Options Data: Teva Pharmaceuticals, Inc. (TEVA), Oracle Corporation (ORCL) and Nvida Corporation (NVDA)investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-300×138.png 300w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-65×30.png 65w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-200×92.png 200w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-400×183.png 400w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-116×53.png 116w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-100×46.png 100w,https://investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-109×50.png 109w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-78×36.png 78w, investorplace.com/wp-content/uploads/2017/12/12-18-2017-Top-Ten-Options-170×78.png 170w” sizes=”(max-width: 552px) 100vw, 552px” />

Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

TEVA stock surged more than 7% on on Friday after Credit Suisse upgraded the shares to “neutral” from “underperform” and lifted its price target to $20 from $8. The brokerage firm praised Israel-based Teva’s plan to layoff 10,000 employees as a positive turnaround move for investors.

However, the layoffs had the unintended consequence of practically shutting down Israel for half a day. The country’s biggest labor union went on strike for half of Sunday, closing the airport, stock exchange, banks and all government ministries in protest of the mass layoffs.

TEVA options traders clearly focused on the positives for the country. Volume topped 226,000 contracts, with activity rising to roughly 2.6 times TEVA’s daily average. Calls made up 60% of the day’s take. That said, January 2018 options activity reveals a bit of profit taking on TEVA.

Specifically, the January 2018 put/call open interest ratio rose last week from 0.55 on Monday to 0.64 as of this morning. Call volume remained heavy throughout the week, meaning that existing call positions were closed for a profit, or traders rolled their positions higher and into a later month to benefit from continued gains.

Oracle Corporation (ORCL)

Oracle released its quarterly earnings report last week, and the results were not well received at all. The company topped quarterly earnings and revenue expectations, but issued guidance below Wall Street’s targets. Specifically, Oracle said it expected revenue growth of 2%-4% with adjusted earnings of 68-70 cents per share, below the analyst estimate of 72 cents.

Furthermore, cloud growth, while solid for Oracle, remained well below that of competitors Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).

But ORCL stock is up this morning after announcing that the company was buying Australia’s Aconex Ltd for $1.19 billion. Aconex specializes in web-based project management software that could help boost Oracle’s presence in business cloud offerings.

ORCL options traders were mixed on last week’s earnings performance. Volume spiked to 186,000 contracts, or nearly five times Oracle’s daily average. That said, calls only made up 55% of the day’s take, as puts gained momentum on ORCL stock.

Furthermore, the January 2018 put/call OI ratio indicates a fair amount of pessimism, arriving at 0.91. Currently, peak put OI for the series totals 45,000 contracts at the out-of-the-money $40 strike.

Nvidia Corporation (NVDA)

NVDA stock has taken a bit of a beating in the past month, as analysts fret of the implosion of demand from cryptocurrency miners. However, RBC Capital Markets thinks the risks are being overstated. According to the ratings firm, while bitcoin and ethereum will both see less mining demand, every other cryptocurrency on the market is still going strong. As a result, Nvidia should continue to see strong demand for GPUs to mine these other currencies.

NVDA options traders gobbled up the bullish news. Volume jumped to 174,000 contracts on Friday, with calls making up 61% of the day’s take. What’s more, the attention to calls could mark a reversal in sentiment for NVDA.

Currently, the January 2018 put/call OI ratio arrives at a lofty 1.18 for NVDA stock. However, this reading has trended lower in recent weeks, as traders banked off a rebound in NVDA stock. Additional leverage from analyst notes on cryptocurrency miners could add fuel to this fire, and help push NVDA steadily higher heading into 2018.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Top 5 Undervalued Stocks For 2018

If youre trying to edge the overall stock market, you can take your chances by picking individual issues, or you could buy an actively managed mutual fund. But some exchange-traded funds may get the job done, too, and it wont cost you much to give them a shot.

Quiz: Test Your Knowledge of ETFs

ETFs are like mutual funds, but they trade like stocks. The biggest and cheapest ETFs mirror major benchmarks, such as Standard & Poors 500-stock index. Annual fees for many ETFs are extraordinarily lowas little as 3 cents per year for every $100 invested.

Yet you dont need to pay much more for ETFs that aim to beat the major bogeys. Such ETFs hold baskets of stocks that often look very different from the S&P 500. Some of these funds focus on shares of undervalued small companies. Others tilt toward stocks with upward share-price momentum, or companies with high-quality balance sheets. You can also buy low volatility ETFs that should hold up relatively well in a market downturn.

Top 5 Undervalued Stocks For 2018: Chipotle Mexican Grill Inc.(CMG)

Advisors’ Opinion:

  • [By Peter Graham]

    A long term performance chart shows El Pollo LoCo Holdings stabilizing over thepast two yearswhile potentialpeers like large cap Chipotle Mexican Grill, Inc (NYSE: CMG) andsmall capsFiesta Restaurant Group Inc (NASDAQ: FRGI) and Chuy’s Holdings Inc (NASDAQ: CHUY)have performed better in the past and appear to be in downtrends for the past 1 1/2 years:

  • [By Mike Turner]

    Turner pick Chipotle Mexican Grill(CMG) as his entry into the Best Stocks competition. Chipotle certainly has been one of the best stocks to buy in years past; CMG stock has earned a return of 930% in the past decade, beating the S&P 500’s 105% return by more than a little bit.

    Brushing off the recent supply problems that resulted in dozens of customers getting sick from E. coli, Turner believes the stock can return to the $700 range when the business recovers from its current rough patch. 

  • [By The Ticker Tape]

    For more earnings coverage, check out what might be expected when McDonald's Corporation (NYSE: MCD) The Coca-Cola Co (NYSE: KO), and Chipotle Mexican Grill, Inc. (NYSE: CMG) report earnings tomorrow. Later in the week, tech titans Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT) and Intel Corporation (NASDAQ: INTC) report after market close on Thursday.

Top 5 Undervalued Stocks For 2018: Microsoft Corporation(MSFT)

Advisors’ Opinion:

  • [By Paul Ausick]

    Microsoft Corp. (NASDAQ: MSFT) traded down 0.97% at $62.57. The stock’s 52-week range is $48.04 to $64.10. Volume was about 40% below the daily average of around 28 million shares. The company had no specific news Thursday.

  • [By Travis Hoium]

    Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) are joining with investment firm Allotrope Partners to build a microgrid investment fund that will help bring electricity to developing regions around the world. Between 2018 and 2020, the fund expects to deploy around $50 million in India, Indonesia, and East Africa.

  • [By Benzinga News Desk]

    Stephens (Equal-Weight) and Citi (Sell) both downgraded Atwood Oceanics (NYSE: ATW).

    Sell-Side's Most Noteworthy Calls
    Investec downgraded Anheuser-Busch (NYSE: BUD) to Hold.
    Deutsche Bank downgraded Freeport McMoRan (NYSE: FCX) to Hold.
    Goldman Sachs upgraded Microsoft (NASDAQ: MSFT) to Buy.
    Barclays upgraded Teck Resources (NYSE: TCK) to Overweight.
    BTIG started Adobe (NASDAQ: ADBE) at Neutral.
    Deal Talk

    U.S. oil refiner Tesoro (NYSE: TSO) said it would buy Western Refining (NYSE: WNR) for $4.1 billion to add refineries in Texas, New Mexico and Minnesota. The combined company will have refining capacity of over 1.1 million barrels per day. Tesoro has refineries in California, Washington, Alaska, Utah and North Dakota.

Top 5 Undervalued Stocks For 2018: Flagstar Bancorp, Inc.(FBC)

Advisors’ Opinion:

  • [By Dustin Blitchok]

    When Alessandro DiNello was named CEO of Flagstar Bancorp Inc (NYSE: FBC) in 2013, the bank was on a financial precipice.

    The bank’s business was almost entirely mortgages. As the industry unraveled nationally, Flagstar accepted $267 million in TARP money in 2009 — as well as private equity financing — to maintain solvency.

Top 5 Undervalued Stocks For 2018: SPAR Group Inc.(SGRP)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Wednesday, our Under the Radar Moversnewsletter suggested going long on small cap international merchandising and marketing services stockSPAR Group Inc (NASDAQ: SGRP):

Top 5 Undervalued Stocks For 2018: Insmed, Inc.(INSM)

Advisors’ Opinion:

  • [By Lisa Levin]

    Insmed Incorporated (NASDAQ: INSM) shares shot up 113 percent to $26.15 following the announcement of positive top-line results from its Phase 3 Convert study of ALIS in adult patients with treatment-refractory nontuberculous Mycobacterial (NTM) lung disease..

stock market picks

During last night’s speech to Congress, President Trump said very little about his much-anticipated plan for tax reform. One thing he did say was this:

We will provide massive tax relief for the middle class.

US President Donald J. Trump shakes hands on his way out after delivering his first address to a joint session of Congress from the floor of the House of Representatives in Washington, DC, 28 February 2017. / AFP / POOL / JIM LO SCALZO (Photo credit should read JIM LO SCALZO/AFP/Getty Images)

This promise was surely met by cheers from coast to coast, as it should have been. But it raises an interesting question: how does a middle-class taxpayer measure whether the President delivers on his promise? Do you simply view the tax cuts for the middle class in isolation? Or must the cuts be viewed in their larger context, relative to those bestowed upon the richest Americans?

stock market picks: HCI Group, Inc.(HCI)

Advisors’ Opinion:

  • [By Jim Robertson]

    Small cap Florida insurance stock HCI Group Inc (NYSE: HCI) has taken a hit with shares down around 21% over the past week on predictions that Hurricane Irma would hit Florida albeit sharesrose 2.74%on Friday when it became clear that it would not be as catastrophic as feared:

stock market picks: Microsoft Corporation(MSFT)

Advisors’ Opinion:

  • [By Benzinga News Desk]

    Stephens (Equal-Weight) and Citi (Sell) both downgraded Atwood Oceanics (NYSE: ATW).

    Sell-Side's Most Noteworthy Calls
    Investec downgraded Anheuser-Busch (NYSE: BUD) to Hold.
    Deutsche Bank downgraded Freeport McMoRan (NYSE: FCX) to Hold.
    Goldman Sachs upgraded Microsoft (NASDAQ: MSFT) to Buy.
    Barclays upgraded Teck Resources (NYSE: TCK) to Overweight.
    BTIG started Adobe (NASDAQ: ADBE) at Neutral.
    Deal Talk

    U.S. oil refiner Tesoro (NYSE: TSO) said it would buy Western Refining (NYSE: WNR) for $4.1 billion to add refineries in Texas, New Mexico and Minnesota. The combined company will have refining capacity of over 1.1 million barrels per day. Tesoro has refineries in California, Washington, Alaska, Utah and North Dakota.

  • [By WWW.KIPLINGER.COM]

    Despite being the second-largest company in the world by market cap, Alphabet doesnt pay a dividend at all. Apple Inc. (AAPL) and Microsoft Corporation (MSFT), who are first and third on the list, respectively, have become very reliable dividend payers in recent years. In fact, Id go so far as to call both dividend-raising machines.

  • [By WWW.THESTREET.COM]

    The sidewalks outside stores like Armani, Dolce & Gabanna, Ralph Lauren (RL) , Gap (GPS) , Prada, Abercrombie & Fitch (AF) , Microsoft (MSFT) and Harry Winston are now lined with metal barricades. The strip commands some of the highest retail rents in the world, with the average annual rent being $3500 per square foot.

  • [By Giulio Prisco]

    Microsoft (NSDQ:MSFT)acquired Maluuba, a Montreal-based company with an Artificial Intelligence (AI) research lab where researchers have been modeling some of the innate capabilities of the human brain, from memory and common sense reasoning to curiosity and decision making. We examine how this acquisition could benefit Microsoft stock investors.

stock market picks: Gaming and Leisure Properties, Inc.(GLPI)

Advisors’ Opinion:

  • [By Seth McNew]

    One way Penn has been able to unlock extra value is by spinning off a portion of operations as a real estate investment trust (REIT) as a way to split up the physical property from the gaming operations. Following that 2013 creation of Gaming and Leisure Properties Inc(NASDAQ:GLPI),Penn essentially pays leasing fees to the REIT so it can focus on operations with a leaner balance sheet. Here’s a more in-depth analysis of the upside of Penn’s REIT model.

  • [By Monica Gerson]

    Gaming and Leisure Properties Inc (NASDAQ: GLPI) shares fell 3.25 percent to $31.90 in pre-market trading. Gaming and Leisure Properties priced offering of 10.53 million shares of common stock for gross proceeds of $333 million.

stock market picks: Key Tronic Corporation(KTCC)

Advisors’ Opinion:

  • [By Lisa Levin]

    Computer Peripherals: This industry rose 2.21% by 10:15 am ET. The top performer in this industry was Key Tronic (NASDAQ: KTCC), which gained 0.3%. Key Tronic’s trailing-twelve-month ROE is 14.57%.

Stocks Decline on Tax Cut Fatigue

U.S. equities moved lower on Tuesday as investors grew tired of the constant headlines concerning the GOP’s tax cut plans. And besides, much of the speculative excitement has shifted over to cryptocurrencies, with Bitcoin sliding hard after the close in what looks like the start of a prolonged pullback.

In the end, the Dow Jones Industrial lost 0.2%, the S&P 500 lost 0.3%, the Nasdaq Composite lost 0.4% and the Russell 2000 lost 0.8%. Treasury bonds were under pressure, the dollar weakened, gold lost 0.1% and crude oil gained 0.6%.

stocksinvestorplace.com/wp-content/uploads/2017/12/INDU121917-300×184.jpg 300w, investorplace.com/wp-content/uploads/2017/12/INDU121917-768×470.jpg 768w, investorplace.com/wp-content/uploads/2017/12/INDU121917-1024×627.jpg 1024w, investorplace.com/wp-content/uploads/2017/12/INDU121917-49×30.jpg 49w, investorplace.com/wp-content/uploads/2017/12/INDU121917-200×122.jpg 200w, investorplace.com/wp-content/uploads/2017/12/INDU121917-400×245.jpg 400w, investorplace.com/wp-content/uploads/2017/12/INDU121917-116×71.jpg 116w, investorplace.com/wp-content/uploads/2017/12/INDU121917-100×61.jpg 100w, investorplace.com/wp-content/uploads/2017/12/INDU121917-82×50.jpg 82w,https://investorplace.com/wp-content/uploads/2017/12/INDU121917-78×48.jpg 78w, investorplace.com/wp-content/uploads/2017/12/INDU121917-800×490.jpg 800w, investorplace.com/wp-content/uploads/2017/12/INDU121917-170×104.jpg 170w” sizes=”(max-width: 1083px) 100vw, 1083px” />

Breadth was mixed, with decliners outpacing advancers by a 1.6 to 1. Defensive consumer staples led the way with a 0.2% gain, while yield-sensitive real estate investment trusts and utilities were the laggards, down 1.9% and 1.8%, respectively.

Darden Restaurants, Inc. (NYSE:DRI) gained 6.8% after reporting better-than-expected quarterly results amid a difficult industry backdrop thanks to positive traffic trends at its Olive Garden and LongHorn restaurants. Apple Inc. (NASDAQ:AAPL) fell 1.1% on a downgrade from Nomura analysts on a belief the iPhone X lift is fading and that the coming tax cut bill isn’t a significant boost to stocks like AAPL.

On the economic front, housing starts increased 3.3% to the second-highest in 10 years, with single-family homes showing the best performance in more than a decade.

Turning to the tax bill, the legislation passed the House by a 227-203 margin and moves to the Senate, where a vote is expected sometime later tonight. The passage is expected to be relatively drama free. A “sell-the-news” dynamic is setting in now, with the WSJ reporting that the tax plan could actually hit the foreign profits of giant tech stocks like Microsoft Corporation (NASDAQ:MSFT).

The House is reportedly planning to vote on the bill a second time tomorrow morning in order to comply with parliamentary rules.

Conclusion

JNKinvestorplace.com/wp-content/uploads/2017/12/JNK121917-300×184.jpg 300w, investorplace.com/wp-content/uploads/2017/12/JNK121917-768×470.jpg 768w, investorplace.com/wp-content/uploads/2017/12/JNK121917-1024×627.jpg 1024w, investorplace.com/wp-content/uploads/2017/12/JNK121917-49×30.jpg 49w, investorplace.com/wp-content/uploads/2017/12/JNK121917-200×122.jpg 200w, investorplace.com/wp-content/uploads/2017/12/JNK121917-400×245.jpg 400w, investorplace.com/wp-content/uploads/2017/12/JNK121917-116×71.jpg 116w, investorplace.com/wp-content/uploads/2017/12/JNK121917-100×61.jpg 100w, investorplace.com/wp-content/uploads/2017/12/JNK121917-82×50.jpg 82w,https://investorplace.com/wp-content/uploads/2017/12/JNK121917-78×48.jpg 78w, investorplace.com/wp-content/uploads/2017/12/JNK121917-800×490.jpg 800w, investorplace.com/wp-content/uploads/2017/12/JNK121917-170×104.jpg 170w” sizes=”(max-width: 1083px) 100vw, 1083px” />

Keep a close eye on high-yield bonds, which I believe will the be catalyst for a nasty downturn in January. The GOP tax bill is highly stimulative at a time when the economy and the job market are operating at new full potential.

Not only will it boost inflation, but it will force the Federal Reserve to tighten policy more aggressively.

Bond market weakness and higher default expectations will spill into equities as well.

Today’s Trading Landscape:

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.

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