U.S. stocks have continued to slip as Wall Street prepares for another rate hike from the Federal Reserve.
After wobbling between small gains and losses throughout the trading session, the S&P 500 closed higher 0.7% on Monday. The benchmark stock index was coming off one of its worst weeks of the year, when it fell nearly 5%.
The reality is it has been a volatile summer of trading. The stock market rally proved short-lived as investors lost hope that the economy would look better in the coming months. One driver for the grim mood was last week’s Consumer Price Index (CPI), which showed inflation was higher than expected.
Consumer prices rose 8.3% year-over-year in August, down from 8.5% over in July but above the 8.1% economists expected. We talked more about this and the effect this will have on the Fed in last Tuesday’s Market 360 issue.
It’s important that you begin adjusting your portfolio to make sure that you’re invested in fundamentally superior companies – companies with strong sales and earnings growth and positive outlooks – as these will be the go-to names for investors once third-quarter earnings season gets underway.
To help make sure you’re staying away from the worst names, I decided to revise my Portfolio Grader recommendations for 68 blue chip stocks. 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 act accordingly.
You can find the first 10 stocks that have been downgraded from Hold to Sell in the chart below. Click here for the full list of 68 stocks.
|Ticker||Company Name||Total Grade|
|DELL||Dell Technologies, Inc. Class C||D|
|DGX||Quest Diagnostics Incorporated||D|
|DLR||Digital Realty Trust, Inc.||D|
|ESS||Essex Property Trust, Inc.||D|
|GE||General Electric Company||D|
|HON||Honeywell International Inc.||D|
|IX||ORIX Corporation Sponsored ADR||D|
|KKR||KKR & Co Inc.||D|
This list should give you a good place to start, but if you want to invest in the best stocks, then I encourage you to consider my Growth Investor Buy Lists. My Buy Lists are chock-full of fundamentally superior stocks, which is why they achieved 62.3% average annual sales growth and 455.7% average annual earnings growth in this year’s second-quarter earnings season.
If you want to be successful in the current market environment— which is growing more narrow and fundamentally focused— it’s important to invest in companies that are able to maintain robust earnings and sales growth, as well as benefit from positive analyst estimates. These are the stocks that are well-positioned to prosper – no matter which way the market turns next.
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