Wall Street is on pins and needles today as it awaits tomorrow’s big Federal Open Market Committee (FOMC) meeting. I think we can all agree that another key interest rate hike is baked in the cake. The question is whether it will be another 0.50% increase or a smaller 0.25% hike (which is what Wall Street is hoping for).
However, even more important than the rate hike will be the FOMC statement. We need a dovish statement that indicates that the Fed is at or near the end of its rate hikes. Considering the recent economic data and the fact that the Treasury yields are above the federal fund rates, there is good reason for the Fed to stop raising rates.
If the FOMC statement and Fed Chairman Jerome Powell provide any dovish language that signals the Fed is nearing the end of its interest rate hikes, an impressive stock market rally could be in the cards.
Aside from the FOMC meeting, a slew of earnings reports from the big tech and energy companies are also being released this week. We heard from Exxon Mobil Corporation (XOM) this morning, which reported record earnings, and Apple Inc. (AAPL), Amazon.com (AMZN), Alphabet (GOOG) and Meta Platforms (META) will announce their latest quarterly numbers later this week. I’ll review the energy earnings on Friday and the big tech earnings on Saturday, so keep an eye on your inbox for my upcoming Market 360 articles!
Today, I want us to focus on my latest Portfolio Grader upgrades and downgrades. Not surprisingly, Portfolio Grader ratings are shifting as quarterly results are released, as institutional buying pressure and analysts’ earnings revisions can impact a stock’s total grade.
Case in point: I revised my Portfolio Grader recommendations for 105 blue-chip stocks over the weekend after taking a closer look at the latest institutional buying pressure and each company’s fundamental health. 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.
I’ve included the first 10 stocks that were downgraded from a Hold (C-rating) to a Sell (D-rating) in the chart below, but for the full list of 105 stocks – including their Fundamental and Quantitative Grades – click here.
|Ticker||Company Name||Total Grade|
|ACN||Accenture Plc Class A||D|
|BBD||Banco Bradesco S.A. Sponsored ADR Pfd||D|
|BBDO||Banco Bradesco S.A. Sponsored ADR||D|
|BK||Bank of New York Mellon Corp||D|
|CCI||Crown Castle Inc.||D|
|DEO||Diageo plc Sponsored ADR||D|
|EL||Estee Lauder Companies Inc. Class A||D|
As we move deeper into the fourth-quarter earnings season, one trend is clear: Companies that provide positive earnings, sales and future guidance are rewarded, while companies that reveal disappointing results and/or weak forward-looking guidance are shot.
So, to prosper in this earnings environment, you’ll want to fill your portfolio with fundamentally superior stocks. If you’re not sure where to look, then consider my Growth Investor service.
The fact of the matter is my Growth Investor stocks are gearing up for what should be a phenomenal earnings announcement season. Several of my Buy List stocks have already preannounced strong fourth-quarter results, and their shares have reacted positively.
I should also add that my average Growth Investor stock is trading at less than half of the S&P 500’s price-to-earnings (PE) ratio, yet it is characterized by 65.5% annual sales growth and 217.7% annual earnings growth. Plus, in the past three months, the analyst community has revised their consensus earnings estimates up by an average of 24.8%.
Normally, when my Growth Investor stocks post 100% annual earnings growth, I do not expect them to appreciate 100% per year due to PE compression. However, right now, my Growth Investor stocks only trade at 7.4 times median forecasted 2023 earnings and have an average dividend yield of 2.97% (as well as 139% annual dividend growth). So, I think PE expansion is much more likely this year.
What this tells me is that we can expect wave-after-wave of quarterly earnings surprises, as well as positive future guidance, which should propel our stocks higher. So, 100% appreciation this year isn’t completely out of the question.
For full details on my Growth Investor service, click here.
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:
Exxon Mobil Corporation (XOM), Amazon.com (AMZN), Alphabet (GOOG), Meta Platforms (META), Colgate-Palmolive Company (CL)