Intraday trading last week was not for the faint of heart. Stocks were whipsawed daily, as big market surges led to equally big market declines – and vice versa.
Despite the constant back and forth, the major indices still managed to squeak out gains for the week, with the S&P 500 and Dow up 1.4% and 1.2%, respectively.
There were several reasons for last week’s market volatility: Namely, the ongoing banking crisis and global central bank action. The latter, in particular, drove a lot of the market’s movements late in the week, as investors attempted to decipher the hawkish and dovish language used by Federal Reserve officials in last week’s Federal Open Market Committee (FOMC) meeting. (If you missed my review of the FOMC meeting and Fed Chairman Jerome Powell’s comments during his post-meeting conference, you can catch up here.)
This Monday started on much stronger footing. As I explained in a Growth Investor Special Market Podcast yesterday, stocks rallied on news that First Citizens Bank acquired Silicon Valley Bank. Hopefully, the acquisition closed the book on the Silicon Valley Bank fiasco.
However, I wouldn’t get too comfortable yet. The reality is Treasury yields continue to meander higher, which tells me that there is still some uncertainty floating around Wall Street about the banking sector. In addition, Fed officials will be speaking throughout the week, and if their comments are anything but dovish, more volatility could be in the cards.
This Week’s Ratings Changes
It’s important to prepare your portfolio for any potential volatility by selling bad stocks and buying better ones. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health in Portfolio Grader, I decided to revise my Portfolio Grader recommendations for 84 big blue chips.
Of these 84 stocks, 18 were downgraded from a “Hold” (C-rating) to a “Sell” (D-rating). I’ve listed the first 10 that were downgraded from a Hold to a Sell below, but for the full list of 84 stocks – including their Fundamental and Quantitative Grades – click 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|
|BKR||Baker Hughes Company Class A||D|
|BRK.A||Berkshire Hathaway Inc. Class A||D|
|CBRE||CBRE Group, Inc. Class A||D|
|CINF||Cincinnati Financial Corporation||D|
|CNI||Canadian National Railway Company||D|
|DELL||Dell Technologies, Inc. Class C||D|
|DTE||DTE Energy Company||D|
If you want to be successful in a volatile market environment, then you need to be invested in the market leaders. If you’re not sure where to look, then consider my Growth Investor service. My average Growth Investor stock is characterized by 39.2% average annual sales growth and 292.1% average annual earnings growth.
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To become a member of Growth Investor today, please click here.
P.S. On August 19, 2022, the Fed released a 43-page report explaining how bad the economy really is. This report was not talked about during the press conference, but it suggests policymakers can’t do the jobs by themselves and actually could make matters worse.
The reality is the Fed popped another bubble. But this time not just in tech or real estate – but the entire stock market as a whole. That’s why I am urging you to get the details of this report and take action before it’s too late.
Click here for the shocking details.
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:
CSX Corporation (CSX)