Last week the markets saw their best single-session gain in more than two years as investors celebrated the favorable Consumer Price Index (CPI) reading. And then today’s Producer Price Index (PPI) had Wall Street cheering again.
PPI increased 0.2% in October, which was less than economists’ expectations for a 0.4% increase. PPI rose 8% year-over-year, which was also below economists’ forecasts for an 8.4% rise. Core PPI, which excludes food, energy and trade services, climbed 0.2% in October and 5.4% year-over-year.
Out of the S&P 500, Dow and NASDAQ, the tech-heavy NASDAQ staged the biggest rally – as of this writing, it’s up more than 1% today and up nearly 8% since November 4. On the flip side, the 10-year Treasury fell below 3.8% this morning and is well off its November high of 4.22%.
As investors dip their toes back into the tech sector, some tech stocks are beginning to find their groove again in Portfolio Grader, too.
Case in point: United Microelectronics Corp. (UMC).
For the last several months, this leading global semiconductor foundry has come under pressure along with the semiconductor sector. Until November 10, it had been in a downtrend, trading below $7 since mid-August. It had also been stubbornly stuck at a D-rating in Portfolio Grader. However, that all changed after United Microelectronics released strong October sales on November 7.
The company achieved NT$24.34 million, up 27% from NT$19.16 million in October 2021. For the first 10 months of the year, UMC has achieved total sales of NT$235.21 million, compared to NT$173.07 million in the first 10 months of 2021.
Co-president Jason Wang said, “Moving into the fourth quarter, we expect to face headwinds amid demand weakness, impacted by factors including the inflationary environment and Ukraine war. While UMC will not be immune to the inventory correction affecting the industry, we will work closely with our customers as they adjust to current market conditions.”
UMC has rallied more than 17% in the wake of its strong October results, and that boost in institutional buying pressure bumped UMC from a Sell (D-rating) to a Hold (C-rating) in Portfolio Grader.
Of course, UMC wasn’t the only stock upgraded recently. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health over the weekend, I decided to revise my Portfolio Grader recommendations for 103 big blue chips.
You can get a quick peak at the first 10 of the 39 companies that were upgraded from Sells to Holds in the chart below. I should also add that 30 stocks were upgraded from a Hold to a Buy (B-rating). 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. For the full list of 103 stocks, click here.
|Ticker||Company Name||Total Grade|
|BAM||Brookfield Asset Management Inc. Class A||C|
|BEN||Franklin Resources, Inc.||C|
|BNS||Bank of Nova Scotia||C|
|CINF||Cincinnati Financial Corporation||C|
|COO||Cooper Companies, Inc.||C|
|CTSH||Cognizant Technology Solutions Corporation Class A||C|
|DLR||Digital Realty Trust, Inc.||C|
Even though tech stocks rallied this month, the companies that should be the biggest winners will likely be those that can prosper in an inflationary environment. The reality is that even though inflation has declined a bit, it will remain elevated for the foreseeable future. As an investor, there are things we can do to prepare our portfolio in an inflationary environment to remain on top… no matter what the next few months hold.
And that’s what Project Oracle is all about – helping folks get into the kinds of gains I’ve become known for… only faster. In fact, it recently flagged a stock with stunning fundamentals that is poised to be one of the big market winners. I will release the full details – the company name, ticker and my buy limit price – after the market closes on Wednesday, November 16.
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: