Buckle up, folks, because we are in for a very busy week.
More than 150 S&P 500 companies are reporting their latest quarterly earnings results this week – including four of the Magnificent Seven. Microsoft Corporation (MSFT) reports today, Meta Platforms, Inc. (META) follows up with its report on Wednesday, and then Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN) are up with their quarterly numbers on Thursday.
We already heard from Alphabet Inc. (GOOGL) and Tesla, Inc. (TSLA) last week, and Wall Street wasn’t happy with either of their results. Tesla reported a slight revenue beat but missed earnings estimates by 16.1% – its fourth-straight quarterly miss. Alphabet topped earnings and sales expectations, but the analyst community had hoped for bigger beats.
Both shares of Alphabet and Tesla fell on the heels of the companies’ earnings reports, dragging the broader market lower.
Now, the Federal Reserve will also hold its July Federal Open Market Committee (FOMC) meeting on Wednesday. Wall Street is expecting a dovish Federal Open Market Committee (FOMC) statement, though some believe there’s at least one key interest rate cut in the cards, according to CME Group.
As you know, I think the Fed should cut rates at the July meeting, but a dovish statement is more likely. The fact of the matter is the Fed should be dovish following last Friday’s Personal Consumption Expenditures (PCE) reading. PCE rose 0.1% in June and is now up 2.5% in the last 12 months. The core PCE, excluding food and energy, rose 0.2% in June and 2.6% in the past 12 months. The PCE and core PCE were in line with economists’ consensus expectations.
Also important to note: Treasury yields declined in the wake of the PCE. The 10-year Treasury declined on Friday and continues to trek lower today. The improving PCE coupled with the drop in the 10-year Treasury yield should persuade the Fed to issue a dovish FOMC statement on Wednesday and a key interest rate cut in September.
So, strong earnings results from the Magnificent Seven and a dovish FOMC statement could ignite a broad market rally.
This Week’s Ratings Changes
With the Fed on deck tomorrow and a slew of companies preparing to release their earnings this week, I went ahead and took a fresh look at the latest institutional buying pressure and each company’s financial health. I decided to revise my Portfolio Grader recommendations for 158 big blue chips. Of these 158 stocks…
- Nineteen stocks were upgraded from a Buy (B-rating) to a Strong Buy (A-rating).
- Forty stocks were upgraded from a Hold (C-rating) to a Buy (B-rating).
- Thirty-five stocks were upgraded from a Sell (D-rating) to a Hold.
- Twenty-seven stocks were downgraded from a Buy to a Hold.
- Thirty-one stocks were downgraded from a Hold to a Sell.
- And six stocks were downgraded from a Sell to a Strong Sell (F-rating).
I’ve listed the first 10 stocks rated as a Sell below, but you can find a more comprehensive list – including all 158 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 adjust accordingly.
| Ticker | Company Name | Total Grade |
|---|---|---|
| FDS | FactSet Research Systems, Inc. | D |
| SAIA | Saia, Inc. | D |
| HD | Home Depot, Inc. | D |
| NXPI | NXP Semiconductors NV | D |
| WDAY | Workday, Inc. Class A | D |
| NUE | Nucor Corporation | D |
| WLK | Westlake Corporation | D |
| ENTG | Entegris, Inc. | D |
| EXPE | Expedia Group, Inc. | D |
| DASH | DoorDash, inc. Class A | D |
Prepare for Phase 2 of the AI Revolution
Not only should you prepare your portfolio for this news-packed week, but you also need to prepare for Phase 2 of the AI Revolution.
The first phase of the AI Revolution has been going on for some time now, but we’re now entering the second phase… and it’s all due to quantum computing.
In Phase 2, the tech companies that have led the charge over the past 20-plus years will be upended by smaller, innovative companies that are developing and leveraging quantum computing. Nearly every stock will be impacted by this new AI development.
So, to help investors prepare for Phase 2, my InvestorPlace colleagues Eric Fry and Luke Lango and I created a portfolio of our nine favorite stocks that are poised to benefit in Phase 2.
Click here to find out how to access this brand-new portfolio.
Sincerely,
Louis Navellier
Editor, Market 360
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:
Microsoft Corporation (MSFT)
