Thursday proved to be a choppy day for the stock market. The Dow, S&P 500 and NASDAQ opened significantly lower – down 1.5%, 2% and 3%, respectively – though stocks did rebound in afternoon trading.
The culprit? The red-hot Consumer Price Index (CPI) reading for September. The CPI rose 8.2% year-over-year and 0.4% month-over-month. This was above economists’ forecasts for an 8.1% year-over-year increase and a 0.3% month-over-month increase. Even worse: core CPI, which excludes food and energy, increased 6.6% year-over-year and 0.6% month-over-month. Economists had anticipated core CPI would rise 0.3% month-over-month.
Now, you might be asking, where’s the inflation coming from? Well, I’ll answer that question for you in tomorrow’s Market 360 article, as well as dive deeper into Wednesday’s Producer Price Index (PPI) reading. I will say now that it’s clear that inflation is not cooling off – and that’s a big problem for the Federal Reserve.
In the meantime, it’s important that you’re invested in fundamentally superior stocks, as these are the stocks that will bounce like fresh tennis balls as the market regains momentum.
Bad stocks, on the other hand, fall like rocks. And let me tell you, there are a lot of “rocks” in the stock market 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 86 big blue chips. Of those 86 stocks, 24 stocks were downgraded from a Hold (C-rating) to a Sell (D-rating) and 34 stocks were downgraded from a Buy (B-rating) to a Hold. I’ve included the first 10 stocks that were downgraded to a Sell below, but you can find the full list 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 act accordingly.
|Ticker||Company Name||Total Grade|
|BBY||Best Buy Co., Inc.||D|
|BK||Bank of New York Mellon Corp||D|
|BNS||Bank of Nova Scotia||D|
|BXP||Boston Properties, Inc.||D|
|CHT||Chunghwa Telecom Co., Ltd Sponsored ADR||D|
|CM||Canadian Imperial Bank of Commerce||D|
|ELS||Equity LifeStyle Properties, Inc.||D|
You may notice that not a single energy stock is on this sell list, and for good reason. The reality is the energy sector is poised to post the best earnings in the third quarter. According to FactSet, the energy sector’s earnings are expected to surge 117.6% year-over-year, despite a 25% fall in oil prices from June 30 to September 30. Revenue is forecast to climb 33.7%.
I still think energy stocks remain an investor’s best bets in the current environment, as they continue to be characterized by accelerating earnings and sales momentum – and this should be very apparent during the third-quarter earnings announcement season in October and early November.
It’s why my Growth Investor Buy Lists are chock-full of energy stocks and why I recommended two new energy stocks in my Growth Investor Monthly Issue for October, as well as why several made my Top Stocks list.
So, if you want to ensure that your portfolio is positioned to prosper in the current environment, become a member of Growth Investor today.
P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.
On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.
What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.
Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.
It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.
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:
Amazon.com, Inc. (AMZN)