“Sometimes You Have to Walk”

We’re waking up this morning to learn Trump’s summit with North Korea’s Kim Jong Un was a bust.

Trump and Kim were scheduled to sign a joint agreement earlier this morning in Hanoi, but these plans were abruptly called off when the pair couldn’t reach a deal on denuclearization, the New York Times reports.

After a quick news briefing, Trump hopped on Air Force One without lifting international sanctions against North Korea. Some so-called experts were concerned Trump would “give something away” to Kim in exchange for some meaningless agreement. But Trump stuck to the denuclearization script, telling reporters “sometimes you have to walk.”

For the record, I wasn’t convinced these developments would have any effect on the stock market. Futures are down slightly to begin the new trading day. But it’s difficult to pin the market’s meager losses on what amounts to a political distraction.

Speaking of distractions, Elon “Tusk” is back at it…

Just one day after the SEC asked a judge to hold Elon Musk in contempt, the Tesla CEO goes rogue on Twitter, changing his name to “Elon Tusk” and teasing an announcement that will supposedly happen at some point this afternoon.

Elon decided to follow his little announcement with some bizarre tweets (he’s since changed his profile back to his real name):

elon tweet

Has Elon finally cracked? Or is he just trolling us?

Whatever’s going on, it’s not hurting Tesla shares one bit. The stock climbed nearly 6% yesterday to close just below its flat 200-day moving average.

When I first saw the strange tweets, I thought Elon’s Twitter account had been hacked.

After all, is a high-profile Twitter hack really that far-fetched?

“All of us should assume our personal data has been compromised,” Creditcards.com analyst Ted Rossman tells MarketWatch. “There have been so many high-profile data breaches that chances are, some bad guy somewhere has access to all of our sensitive data.”

Two years ago, the Equifax breach exposed nearly half of Americans to the perils of identity theft — so Rossman isn’t just blowing smoke. These events are a grim reminder of just how vulnerable our information has become in the digital age.

Cybercriminals are everywhere. And they’re becoming more savvy by the day. Individuals and corporations are scrambling to protect their most sensitive information. But as we see almost every week, they’re woefully behind the curve. This has been the bull case for cybersecurity stocks for the past several years.

Investors are finally starting to realize the sector’s growth potential as strong earnings results pour in. This week’s big winner is Palo Alto Networks (NYSE:PANW). Palo Alto’s fourth-quarter earnings topped analyst estimates, sending shares soaring by more than 8% to new all-time highs.

panw

As we’ve already figured out, the cybersecurity sector is ripe for strong earnings beats this year. You had a shot at grabbing speedy gains of 25% on shares of CyberArk Software (NASDAQ:CYBR) right as the stock was breaking out to all-time highs following its own earnings beat earlier this month.

These stocks are finally taking their rightful place as new market leaders. We’ll continue to hold our longer-term PureFunds ISE Cyber Security ETF (NYSE:HACK) position and supplement these gains with short-term trades when the timing is just right…

Finally, biotechs take the lead.

I highlighted the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) breakout to new four-month highs earlier this week. The Spark Therapeutics Inc. (NASDAQ:ONCE) buyout has set the stage for some impressive runs throughout the sector.

In fact, IBB hasn’t slowed down since gapping above its November-December highs on Monday:

IBB

It appears the list of biotechs breaking out to new 52-week highs will continue to grow heading into the weekend…

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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