Now that the House has voted to suspend the debt ceiling for nearly four months, Wall Street and Main Street alike can breathe a little easier. This, combined with unusually strong earnings reports from the tech sector (Apple (NASDAQ:AAPL) notwithstanding), had investors in a good mood, so we saw a modest rally Thursday.
Unfortunately, I don’t expect this to last. What’s happening right now is that we’re in the midst of fourth-quarter earnings season, and usually the strong earnings announcements come out early and the weak announcements tend to come a little later. So I expect that market to become pretty bumpy around the second week of February.
Want to know my take on how to navigate the potentially choppy trading action to come? Trim your portfolio of all dead weight. I’m talking about all of the companies that have announced mixed earnings results or have sloppy guidance looking forward. Of course, it can be tedious reviewing the latest earnings results for each of your companies, so I’ve broken down the top 35 big blue chips that you should steer clear of.
|ABX||Barrick Gold||F||D||Strong Sell|
|BBY||Best Buy||F||D||Strong Sell|
|BHI||Baker Hughes||F||D||Strong Sell|
|CHK||Chesapeake Energy||F||D||Strong Sell|
|CXO||Concho Resources||F||D||Strong Sell|
|DVN||Devon Energy||F||D||Strong Sell|
|GT||Goodyear Tire & Rubber||D||D||Sell|
|JCP||J.C. Penney||F||D||Strong Sell|
|NEM||Newmont Mining||F||D||Strong Sell|
|NSC||Norfolk Southern||F||D||Strong Sell|
|PRU||Prudential Financial||F||D||Strong Sell|
|PXD||Pioneer Natural Resources||D||D||Sell|
|SE||Spectra Energy||F||D||Strong Sell|
To wrap up, the best thing you can do to prepare (and to weather the current choppy trading activity) is invest solely in companies with the best earnings prospects. Of course, the best place to start is to run your portfolio through my Portfolio Grader screening tool. It doesn’t take much to see that sticking to A- and B-rated stocks pays off big in the long run.