Blue-chip stocks to avoid right now
It’s been a lousy first half of the week – not thanks to the shocking consumer inflation report – and the market is still struggling to find momentum in the second half of the week.
As you may recall, markets fell sharply on Tuesday in reaction to the inflation surprise, with the S&P 500 falling 4.32% and the Dow Jones and NASDAQ falling 3.94% and 5, 16%, respectively.
Now, as we talked about on Tuesday Market360, the consumer price index (CPI) August’s reading was much higher than economists expected – and Wall Street wasn’t happy about it. Specifically, the CPI rose 8.3% year-over-year, above forecasts for an 8.1% rise. The CPI also rose 0.1% month over month, which was well above estimates for a 0.1% decline.
Core CPI, which excludes energy and food, rose 6.3% year over year and 0.6% month over month. That compares with economists’ projections that the core CPI is expected to rise 6.3% year-on-year and 0.6% month-on-month.
As a result, the Federal Reserve will likely raise interest rates by 75 or even 100 basis points at next week’s Federal Open Market Committee (FOMC) meeting. The market currently sees an 80% chance of a 75 basis point rise and a 20% chance of a full percentage increase. Furthermore, the Fed may even raise rates again in November before the midterm elections, which is highly unusual.
Then yesterday we got the Producer Price Index (PPI) report, which helped stocks firm up a bit. The PPI measures the selling price of goods that producers pay or wholesale prices. For August, the PPI fell 0.1%, which was in line with expectations. Year-over-year, the index is up 8.7%, which is the lowest we’ve seen since August 2021. That’s good news, folks.
Additionally, this morning’s retail sales report showed 0.3% growth in August, proving that the consumer remains resilient even in the face of inflation.
As the market continues to hold its breath awaiting the FOMC statement next week, the PPI indicates lower prices on the horizon.
What’s important right now is to stay focused on stocks that will continue to profit in our current market environment. The fact is, in an inflationary environment like the one we find ourselves in today, our best bet is to stay focused on commodity stocks. I’m talking about companies in the energy, consumer staples and industrials sectors.
There are also stocks to avoid, and today I want to go over the top-notch stocks you should avoid right now. After taking a close look at the latest data on institutional buying pressure and the fundamental health of each company, I’ve decided to revise my Portfolio Grader recommendations for 61 headlines.
Now, of those 61 stocks, 13 have been downgraded from a Hold (C rating) to a Sell (D rating). Chances are you have at least one of these stocks in your portfolio. I’ve included the top 10 stocks for sale in the table below, but you can find the full list of stocks here.
|EL||Estée Lauder Companies Inc. Class A||D|
|GOOG||Alphabet Inc. Class C||D|
|GOOGL||Alphabet Inc. Class A||D|
|GPN||Global Payments Inc.||D|
|HMC||Honda Motor Co., Ltd. Sponsored ADR||D|
|HTHT||ADR sponsored by H World Group Limited||D|
|MFG||Mizuho Financial Group Inc sponsored ADR||D|
|MGA||Magna International Inc.||D|
|PLEASANT||ADR sponsored by NICE Ltd||D|
I should note that there are still many interesting opportunities to invest in. In fact, there’s a phenomenon that only happens once a decade. it’s happening right now this opens a small window for potentially huge gains for some low-priced stocks.
I will explain everything in my special Less than $10 event, which will go live today at 4 p.m. sharp EST. I’ll also reveal the name, ticker symbol and more about an amazing company that is currently trading at less than $10 per share and is uniquely positioned to benefit from this phenomenon. There is still time to register if you haven’t already. Simply click here now to reserve your spot. Don’t forget that participation is 100% free. I look forward to speaking with you soon!
Publisher hereby declares that as of the date of this e-mail, Publisher owns, directly or indirectly, the following securities which are the subject of commentary, analysis, opinion, advice or recommendations in, or which are otherwise mentioned in, the dissertation below:
Alphabet Inc. (GOOG)