First, I want to thank those who joined me for my special event on Tuesday, The Great American Wealth Shift. It was a great success, and I enjoyed discussing the importance of money flow. For those who were unable to make this event, a replay of The Great American Wealth Shift is available here for your viewing.
Not only did we cover money flow, but I shared the sector that is about to shed billions and the sector that’s seeing a surge in money flow. I also gave away a bonus pick and revealed the No. 1 stock to avoid. Click here to watch the replay of The Great American Wealth Shift event now.
Stocks are rebounding nicely over the past two days after last week’s plunge lower. As I write this, the S&P 500 and Dow are up more than 1% and the NASDAQ is up more than 2%.
There are two main catalysts behind the strength: a dovish Federal Reserve and positive earnings results.
In regard to the Fed, the Federal Open Market Committee (FOMC) minutes released yesterday proved to be quite dovish. The Fed plans to raise interest rates by 0.5% in June and again in July to help combat decades-high inflation. Wall Street already knows further rate increases are in the cards, but what is surprising is how dovish the Fed officials are.
You see, a lot of people expected the Fed to announce a higher interest rate increase, but instead they stayed the course. With unemployment low, the Fed doesn’t want to muddy the waters. And the competition in the housing market gives us indication that the Fed indeed pricked the bubble. We knew this was coming, which is partly why the broader indices rallied into the close. The S&P 500 climbed 0.95%, the Dow rose 0.6%, and the tech-heavy NASDAQ saw a 1.5% lift.
And then there are earnings…
We remain in an environment where companies who post strong results have their stock head higher… while earnings misses send shares tumbling. This is a perfect example of what I like to call “money flow.” Money flowing into a stock drives it higher, while money that flows out of a stock triggers a selloff.
Just take a look at Agilent Technologies, Inc. (A). This is a company that provides laboratories worldwide with instruments, services, consumables, applications and expertise for life sciences, diagnostics and applied chemical markets. On Tuesday, the company reports earnings for its second quarter in fiscal year 2022.
For Agilent Technologies’ second quarter, revenue grew 5% year-over-year and net income rose 16% year-over-year. I should add that Agilent increased its guidance for fiscal year 2022 earnings per share to a range of $4.86 per share to $4.93 per share. For the full year, company management continues to expect revenue between $6.67 billion and $6.73 billion. This represents revenue growth of 5.6% to 6.5%.
Leading into the earnings report, A shares began to see an increase in money flow, which boosted the stock from a C-rating to a B-rating in my Portfolio Grader over the weekend. In the wake of Agilent Technologies’ strong second-quarter earnings results, the money flow persisted, and the stock popped 2%. Those who follow my Portfolio Grader would’ve known that this stock was a “Buy” ahead of the company’s earnings report and had an opportunity to ride the stock’s wave.
Now, Agilent Technologies isn’t the only company whose ratings were revised this weekend. 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 75 big blue chips – of those 75, 24 stocks were updated to a buy.
Below, I have listed the first 10 stocks that were upgraded to a buy over the weekend. For the full list of the 75 stocks and their Quantitative Grade and Fundamental Grade, 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.
|Upgraded: From Hold to Buy|
|A||Agilent Technologies, Inc.||B|
|APO||Apollo Global Management Inc.||B|
|CNA||CNA Financial Corporation||B|
|DAL||Delta Air Lines Inc.||B|
The reality is money flow is ultimately what determines if a stock will go up or down – and this is exactly what my system tracks. I explained it all during The Great American Wealth Shift event on Tuesday. If you missed it, you can watch a replay here.
P.S. Yesterday afternoon, I put on my Great American Wealth Shift event and detailed a massive market move just over the horizon…
I even gave away one of my top recommendations to play this historic shift and my No. 1 stock to avoid.
I also showed folks how to access another stock – one that’s smaller and more illiquid than what I typically recommend.
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:
Amgen Inc. (AMGN), Apollo Global Management Inc. (APO)