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38 Ways to Prepare For Market Choppiness

Updating buy and hold moves in a difficult market


Based on Monday’s market moves, this is already shaping up to be a bumpy trading week. With all eyes on Cyprus and its crumbling banking system, financial stocks opened sharply lower on Monday and finished down across the board. Cyprus caused a stir after its parliament delayed its vote on a bailout package, a deal that would include a minimum 6.75% levy on all bank accounts. Cypriot banks will remain closed until Thursday, but already plenty of account holders are threatening to cash out.

As dramatic as all of this was, it didn’t long for the equities market to recover its footing. By mid-afternoon, Wall Street rebounded thanks to renewed strength in consumer staples, healthcare and tech stocks. It appears that Cyprus’ worries failed to discourage yield-hungry investors from bidding up high-dividend stocks. In the past week, S&P stocks that pay no dividend have edged up just 0.26%, those that pay some kind of dividend have climbed 1.68% while those with generous yields (5% or higher) have advanced 1.96%. As I’ll discuss in greater detail at a later date, the Federal Reserve’s policies are setting the stage for the end of the bond bubble, so high-yield stocks remain as attractive as ever.

But above all else, you would do well to stick to highly-rated stocks in the coming weeks, because things should only get choppier from here.. So let’s look at the 38 big blue chips that have been upgraded and downgraded this weekend. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for each of the stocks listed below.


Last Week’s Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
ADP Automatic Data Processing B C
BMY Bristol-Myers Squibb B C
CHT Chunghwa Telecom B C
KORS Michael Kors C A
MGA Magna C B
NMR Nomura Holdings B C
ORCL Oracle B B
RTN Raytheon B C
STX Seagate Technology B B
TWC Time Warner Cable B B
WAG Walgreen B D

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
COP ConocoPhillips D C
ETR Entergy D C
F Ford C C
GM General Motors C D
HES Hess C C
KYO Kyocera D
UNH UnitedHealth D B


Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
ABV Companhia de Bebidas das Americas C B
ATVI Activision C B
BAC Bank of America C C
GE General Electric C C
JPM JPMorgan C B
NLSN Nielsen C C
NTRS Northern Trust C C
PSA Public Storage C B
SLF Sun Life Financial C C

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
CTSH Cognizant Technology Solutions D B
EL Estee Lauder D B
NUE Nucor D C
TXN Texas Instruments D C
XOM ExxonMobil D B


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