We’re about a week into August, and it’s shaping up to be just as volatile as in previous years. As of this writing, the S&P 500 has slipped 1.9%, the Dow has dipped 0.7%, and the NASDAQ has dropped 3.2%.
The volatility and weakness aren’t surprising. So far, Wall Street has had a lot to contend with, ranging from the Federal Reserve raising key interest rates at its last Federal Open Market Committee (FOMC) meeting and a slew of earnings results. There was also the shocking downgrade on the U.S. Treasury debt by Finch Ratings, which cut its AAA rating to AA+, due to the U.S.’s worsening financial conditions and governance.
Today’s news that China’s imports and exports are down 12.4% and 14.5%, respectively, only spooked investors further, as it’s clear that China has deflation. Moody’s decision yesterday evening to downgrade its ratings on 10 small- to mid-sized banks, as well as its note that six banks could be downgraded next also did not help the market.
Couple this with the fact that most of Wall Street tends to disappear during August and when Europe takes an extended holiday, and stocks were bound to chop around.
Now, the odds of more volatility are in the cards, but the good news is stocks could swing to the upside.
This week, two more important economic reports will be released: the Consumer Price Index (CPI) and Producer Price Index (PPI) for July.
Economists are forecasting CPI to rise 0.2% in July and 3.3% year-over-year. Core CPI, which excludes food and energy, is projected to increase 0.2% in July and 4.7% year-over-year. PPI is expected to rise 0.2% in July and 0.7% year-over-year.
Given that the Federal Reserve will be “data dependent” regarding future rate hikes going forward, additional rate hikes will be unnecessary if consumer and wholesale inflation continues to cool.
I’ll review both the CPI and PPI readings later this week, but in today’s Market 360 I want to focus on the stocks you should avoid if you want your portfolio to prosper to a potentially strong end to the week. And then I’ll share where you should put your money instead.
This Week’s Ratings Changes
After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for 127 big blue chips. Out of the 127 revisions, 34 stocks were downgraded from a C-rating (Hold) to a D-rating (Sell). I’ve listed the first 10 stocks 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 |
|---|---|---|
| A | Agilent Technologies, Inc. | D |
| AEE | Ameren Corporation | D |
| AZPN | Aspen Technology, Inc. | D |
| CF | CF Industries Holdings, Inc. | D |
| CNI | Canadian National Railway Company | D |
| CNP | CenterPoint Energy, Inc. | D |
| CSL | Carlisle Companies Incorporated | D |
| DEO | Diageo plc Sponsored ADR | D |
| EFX | Equifax Inc. | D |
| ENPH | Enphase Energy, Inc. | D |
If you want to add to your portfolio, then you’ll want to consider stocks in the artificial intelligence (AI) space. The reality is an AI Revolution is here, and the companies that are able to incorporate AI into their offerings and services will benefit the most from it.
My fellow InvestorPlace colleagues Eric Fry and Luke Lango agree that there is a lot of potential in the AI space, so we decided to team up and create a very special portfolio called the AI Revolution Portfolio. It features our 10 top picks that are riding the AI Revolution.
We combined my quantitative stock-rating system with Eric’s global macro investing expertise and Luke’s technology insights, and we found 10 stocks that we believe will not only dominate their industries because of their use of AI, but also shape the way the world uses this nascent technology.
But we’re not done building this portfolio yet…
We’re adding a bonus AI stock with significant upside potential. We’ll be releasing the full details on the company – including why we’re so bullish on it right now – after the market closes on Wednesday.
Join us at AI Revolution Portfolio today so you receive our new recommendation as soon as we publish it on our website.
I should add that if you become a member of AI Revolution Portfolio today, you’ll also receive two brand-new reports: How to Buy Private Shares of an AI Innovator and 10 Stocks That Could Go to Zero.
In the first report, Luke explains how to invest in a private AI company in the culinary space. And in the second report, we feature 10 stocks that could soon go to zero as the AI story plays out. These stocks are household names and are held by millions of investors.
Click here to find out how to sign up for AI Revolution Portfolio today.
Sincerely,
Louis Navellier
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:
Enphase Energy, Inc. (ENPH)
