Investors woke up on the wrong side of the bed today, with the S&P 500 and NASDAQ falling more than 1% and the Dow shedding more than 300 points.
There are two reasons behind the weakness. The first is that folks are concerned about the debt ceiling. If Congress does not raise the debt ceiling by the end of the month, there will be a government shutdown.
Personally, I don’t expect this to happen. I think what we’re witnessing is a big game of chicken. Congress will likely give themselves a 30-day extension and kick the can down the road.
However, this uncertainty triggered a rise in Treasury yields, with the 10-year Treasury yield climbing as high as 4.56% this morning – which, in turn, sucked some money out of the stock market.
I should also add that meandering Treasury yields have been a big problem for Wall Street lately. The 10-year Treasury yield broke above the 4.5% level late last week, and it remains above this level today. To put this into perspective, the 10-year Treasury yield stood at 4.3% at the start of the week, and it was at 4.1% at the end of August. The 10-year Treasury yield is now at its highest level in 16 years, though the one positive is that rising Treasury yields are helping the yield curve start to “dis-invert.”
The second reason is the ongoing United Auto Workers (UAW) strike. As I discussed last week, the UAW began an unprecedented strike at all of the Big 3 auto manufacturers – Ford Motor Company (F), General Motors Company (GM) and Stellantis N.V. (STLA) (Chrysler’s parent). It later expanded its strike by walking out of 38 General Motors and Stellantic facilities in 20 states.
The fact of the matter is the UAW wants its workers to have more money and job security. However, this may not be a possibility given that the push by the U.S. government to develop more electric vehicles (EVs) has stalled. EVs have been sitting on dealers’ lots and, in turn, have not been very profitable for U.S. automakers.
So, investors were spooked further when Ford announced this week that it is suspending its CATL electric vehicle battery plant. CATL makes the iron phosphate batteries that Ford is putting into its Mach-E. These are extremely important because they are cheaper and allow EVs to be more competitive.
Essentially what’s happening is that Ford is evaluating if the CATL plant will ever be profitable. If it can’t be profitable, there’s no reason to build it. And if it’s not profitable, then UAW workers might lose their jobs.
Both of these issues are big problems for Wall Street and are causing investors to flee from the stock market today.
So, in today’s Market 360, I’ll reveal 10 stocks that are experiencing big drops in buying pressure and could potentially post bigger losses this week. And then, I’ll share where you can find the stocks that should emerge as the market leaders when the market bounces back.
This Week’s Ratings Changes
After taking a close look at the latest institutional buying pressure and each company’s financial health, I decided to revise my Portfolio Grader for 73 big blue chips. Of these 73 stocks, 24 were downgraded from a B-rating (Buy) to a C-rating (Hold), and 19 were downgraded from a C-rating to a D-rating (Sell).
I’ve listed the first 10 stocks to sell below, but you can find the full list – including the stocks’ Fundamental and Quantitative Grades – 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|
|AWK||American Water Works Company, Inc.||D|
|CNI||Canadian National Railway Company||D|
|CSL||Carlisle Companies Incorporated||D|
|GD||General Dynamics Corporation||D|
|GIS||General Mills, Inc.||D|
|INVH||Invitation Homes, Inc.||D|
Where to Find the Market Leaders
If you’re not sure where to look, then consider my Growth Investor service. My Growth Investor stocks are market leaders and exhibit relative strength. Case in point: My stocks on my Growth Investor Buy List are characterized by 160.9% average earnings growth. Additionally, the average analyst earnings revision in the past three months is 6.9%, so I am expecting another round of big earnings surprises!
The reality is I am investing in the best stocks in the best economic hot spots with improving sales and exploding earnings. This, in turn, will dropkick and drive my stocks higher while other stocks – like the 10 I shared with you today – fall like rocks.
I should add that, on Friday, I will be adding at least one new stock pick to my Buy List in my Growth Investor Monthly Issue for October. So, become a member of Growth Investor today so you have access to my newest buy as soon as the issue is published. Click here to get started now.
(Already a Growth Investor subscriber? Go here to log into the members-only website.)
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: