It was an ugly first half of the week – no thanks to the shocking consumer inflation report – and the market is still struggling to find momentum in the second half of the week.

As you may recall, markets fell sharply on Tuesday in reaction to the inflation surprise, with the S&P 500 falling 4.32% and the Dow and NASDAQ falling 3.94% and 5.16%, respectively.

Now, as we talked about in Tuesday’s Market360, the Consumer Price Index (CPI) reading for August came in much higher than economists had expected – and Wall Street wasn’t happy about it. Specifically, CPI rose 8.3% year-over-year, above forecasts for an 8.1% rise. The CPI also rose 0.1% month-over-month, which was well above estimates for a 0.1% decline.

The core CPI, which excludes energy and food, rose 6.3% year-over-year and 0.6% month-over-month. This compares to economists’ projections for core CPI to increase 6.3% year-over-year and 0.6% month-over-month.

As a result, the Federal Reserve will likely raise interest rates 75 – if not 100 – basis points during next week’s Federal Open Market Committee (FOMC) meeting. The market currently sees an 80% chance of a 75-basis point hike and a 20% chance of a full percentage increase. In addition, the Fed may even raise rates again in November ahead of the midterm elections, which is highly unusual.

Then yesterday we received the Producer Price Index (PPI) report, which helped stocks firm up a bit. PPI measures the selling price of goods producers pay or wholesale pricing. For August, the PPI fell 0.1%, which was in line with expectations. Year-over-year, the index rose 8.7%, which is the lowest we’ve seen since August 2021. This is good news, folks.

Furthermore, the retails sales report this morning showed growth of 0.3% in August, proving that the consumer remains resilient even in the face of inflation.

While the market continues to hold its breath as we wait for the FOMC statement next week, the PPI points to lower prices on the horizon.

What’s important right now is to stay focused on stocks that will continue to profit in our current market environment. The fact is, in an inflationary environment like we are in today, our best bet is to stay focused on commodity stocks. I’m talking about companies in energy, consumer staples, and industrial sectors.

There are also stocks to stay away from, and today, I want to review the blue-chip stocks you should avoid right now. 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 61 big blue chips.

Now, of these 61 stocks, 13 were downgraded from a Hold (C-rating) to a Sell (D-rating). Chances are that you have at least one of these stocks in your portfolio. I’ve included the first 10 stocks to sell in the chart below, but you can find the full list of stocks here.

I should note that there are still plenty of exciting opportunities to invest in now. In fact, there’s a once-in-a-decade phenomenon that’s occurring right now that opens a small window for potentially huge gains for certain low-priced stocks.

I will explain it all in my special Under $10 event, which will go live today, at exactly 4 p.m. Eastern time. I’ll also reveal the name, ticker symbol and much more about an amazing company that is currently trading for less than $10 per share that is especially well-positioned to benefit from this phenomenon. There’s still time to sign up if you haven’t yet. Simply click here now to reserve your spot. Remember, it is 100% free to attend. I look forward to speaking with you soon!

Sincerely,

Source: InvestorPlace unless otherwise noted

Louis Navellier

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:

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