Yesterday, the markets began another week on rough footing. All of the major indices plunged, with the S&P 500 down 2.4%, the Dow down 2.5% and the NASDAQ down 2.6%.
While tariffs have been plaguing the markets lately, there was a new culprit yesterday. Namely, the battle between the White House and the Federal Reserve is heating up.
In contrast to Federal Reserve Chair Jerome Powell’s cautious approach, President Trump took to Truth Social yesterday morning to warn that the economy would slow if key interest rates aren’t cut now.
Specifically, Trump said, “There can be a SLOWING of the economy unless Mr. Too Late [Jerome Powell], a major loser, lowers interest rates, NOW.”
I should mention that this isn’t the first time Trump has criticized the Fed Chair. And I’ll have more thoughts on their feud later this week in Market 360.
But for now, I want to stress that we can’t let this noise distract us. Instead, our focus should be on the first-quarter earnings season.
Last week, the Big Banks kicked things off with the majority exceeding analysts’ estimates. Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) all posted positive earnings surprises. In turn, all four initially climbed higher this week.
Now, it may be early to state that “earnings are working,” but the initial rallies following these earnings beats are a positive. Of the S&P 500 companies that have reported so far, 71% have exceeded analysts’ earnings estimates, posting an average earnings surprise of 6.1%. FactSet now anticipates that the S&P 500 will achieve at least 7.2% average earnings growth for the first quarter.
FactSet also points out that the final earnings growth rate at the end of an earnings season has exceeded the estimated growth rate at the start of the season in 37 of the past 40 quarters. And S&P 500 companies have topped analysts’ earnings estimates by an average of 6.9% in the past decade.
This Week’s Ratings Changes
The bottom line is that wave after wave of positive earnings surprises are in the offing!
Now, this week there are a handful of companies slated to report. But the two I will be watching in particular are Tesla Inc. (TSLA) and Alphabet Inc. (GOOG).
Remember, the Magnificent Seven stocks (of which TSLA and GOOG are members) have been slammed recently due to the tariffs. So, it will be interesting to see what they have to say on the subject. Wall Street will also be paying close attention to their forward-looking guidance.
The bottom line is that even though there is still a lot of volatility in the stock market, earnings season tends to add strength and boost stocks higher. So, let’s just allow earnings to take over and do their thing.
With that in mind, I took a fresh look at the latest institutional buying pressure and each company’s financial health and decided to revise my Stock Grader (subscription required) recommendations for 102 big blue chips. Of these 102 stocks…
- Nine stocks were upgraded from a Buy (B-rating) to a Strong Buy (A-rating).
- Fifteen stocks were upgraded from a Hold (C-rating) to a Buy (B-rating).
- Fourteen stocks were upgraded from a Sell (D-rating) to a Hold.
- Four stocks were upgraded from a Strong Sell (F-rating) to a Sell.
- Sixteen stocks were downgraded from a Strong Buy to a Buy.
- Twenty-seven stocks were downgraded from a Buy to a Hold.
- Fourteen stocks were downgraded from a Hold to a Sell.
- And three stocks were downgraded from a Sell to a Strong Sell.
I’ve listed the first 10 stocks rated as Buys below, but you can find a more comprehensive list – including all 102 stocks’ Fundamental and Quantitative Grades – here. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and adjust accordingly.
| Symbol | Company Name | Quantitative Grade | Fundamental Grade | Total Grade |
| AER | AerCap Holdings NV | B | C | B |
| ALC | Alcon AG | B | C | B |
| AMH | American Homes 4 Rent Class A | B | B | B |
| BBDO | Banco Bradesco SA Sponsored ADR | C | B | B |
| BX | Blackstone Inc. | B | C | B |
| CARR | Carrier Global Corp. | B | C | B |
| EME | EMCOR Group, Inc. | B | B | B |
| EXR | Extra Space Storage Inc. | B | C | B |
| FLEX | Flex Ltd. | B | B | B |
| HCA | HCA Healthcare Inc. | B | D | B |
Earnings Aren’t the Only Market Mover
Now, earnings season isn’t the only event hitting the markets that we should be keeping an eye on right now…
The fact is, thanks to the AI Revolution, a massive wave is on the horizon – and many don’t even see it coming…
It’s so serious that I call it a financial tsunami.
That’s because I’m predicting there will be a stock market crash – but not the kind most people expect.
You see, as far as AI has come, most regular Americans have no idea what’s on the horizon.
We’re talking about an unprecedented rate of change and disruption.
It will dramatically affect your money, the value of your home, your investments, and your ability to retire.
It will be devastating for most Americans. But it will also make a small group rich beyond their wildest dreams.
The thing about a tsunami is, there’s nothing you can do to stop it. It can’t be stopped, no matter how hard you try.
All you can do is prepare for what’s coming.
That’s why I created a special presentation – because it’s absolutely critical to make investments in yourself, in your business, and in your portfolio to ensure that you survive and thrive the coming wave of change.
Click here to watch my urgent warning now.
Sincerely,
Louis Navellier
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
EMCOR Group, Inc. (EME)
