Quant Ratings Updated on 110 Stocks VIEW IN BROWSER The Federal Reserve gave Wall Street an early Christmas present last week by cutting interest rates by a quarter point. As we discussed here in Market 360, this was good news, and the market received it well. The bad news, however, was that it was not a unanimous decision. Of the 12 voting Federal Open Market Committee (FOMC) members, nine voted in favor of a 0.25% rate cut, while three voted against it. Of the three against the cut, two wanted rates to remain steady, while the other preferred a 0.5% cut. Interestingly, of the seven non-voting FOMC members, four also issued “soft dissents”. Thanks to the 43-day government shutdown, the lack of official data going into this meeting played a role in the split vote. But this week, the Fed will get what it wants, as we have a handful of delayed government reports on tap. Specifically, this morning's U.S. employment report for November showed that the economy added 64,000 jobs in November, and the unemployment rate increased to 4.6%. Remember, Fed Chair Jerome Powell said last week that “job creation may be negative,” and added that “we think there’s an overstatement in these (i.e., Labor Department) numbers.” Those were very dovish comments that helped to further boost stocks and bonds. But the reality is the economy has created almost zero jobs since April. And compared to a year ago, it has shed nearly three-quarters of a million jobs. So, I’m glad Powell is on board with the notion that the labor market may be even worse than the official numbers suggest. Personally, I don’t think there is any reason for the Fed to remain restrictive when the U.S. economy is not creating many jobs. In my opinion, the Fed needs to cut key interest rates at least two more times in 2026 and move to a “neutral” rate.” The bottom line is that while this report provides a clearer picture of the labor market, I am wondering if Powell will trust the economic data, since there is plenty of evidence of deflation creeping into the economy. Thursday’s Consumer Price Index (CPI) report for November should prove interesting on that front. (Look for my full thoughts on these reports later this week.) | Recommended Link | | | | Futurist and Senior Analyst Eric Fry just did a little portfolio housekeeping for his readers. But when Eric cleans house, it rains money on those who followed his advice… Liberty Energy Inc. (LBRT) – Up 31.6%, TotalEnergies SE (TTE) – Up 51.2%, Valero Energy Corp. (VLO) – Up 86.2%, Oracle Corp. (ORCL) – Up 27.3%, and Global X Uranium ETF (URA) – Up 53%. So what does Eric Fry say to buy next? He’s got 7 trade ideas he recently released for free, including full analysis, names and ticker symbols. Grab these hot recommendations right here at no cost. |  | | This Week's Ratings Changes In the meantime, I want you to be happy and not worry. Investors will be looking for an end-of-year Santa Claus rally, which happens about 80% of the time around the Christmas holiday, according to The Wall Street Journal. It’s one reason why December tends to be a strong month for the market. And to help you end the year on a high note, I recommend adding fundamentally superior stocks backed by strong institutional buying pressure to your portfolio – and trimming weak stocks that are holding it back. So, I took a look at my Stock Grader (subscription required) recommendations for 110 big blue chips. Of these 110 stocks… - Sixteen stocks were upgraded from Strong (B-rating) to Very Strong (A-rating).
- Seventeen stocks were upgraded from Neutral (C-rating) to Strong (B-rating).
- Eighteen stocks were upgraded from Weak (D-rating) to Neutral.
- Seven stocks were upgraded from Very Weak (F-rating) to Weak.
- Eight stocks were downgraded from Very Strong to Strong.
- Twenty-two stocks were downgraded from Strong to Neutral.
- Eighteen stocks were downgraded from Neutral to Weak.
- And four stocks were downgraded from Weak to Very Weak.
I’ve listed the first 10 stocks rated as Very Strong below, but you can find a more comprehensive list – including all 110 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. | ABEV | Ambev SA Sponsored ADR | A | | APG | APi Group Corporation | A | | ASND | Ascendis Pharma A/S Sponsored ADR | A | | BK | Bank of New York Mellon Corp | A | | BMO | Bank of Montreal | A | | F | Ford Motor Company | A | | FIVE | Five Below, Inc. | A | | GE | GE Aerospace | A | | GEV | GE Vernova Inc. | A | | IX | ORIX Corporation Sponsored ADR | A | Looking for a Strong Finish to 2025 Bottom line, I’m looking for a strong finish to the year and a strong start to 2026. GDP growth is being boosted by the data center boom, the onshoring of many industries, a shrinking trade deficit from booming exports and the fact that the Fed is finally coming to the rescue. Furthermore, the S&P 500 now has the strongest revenue growth in three years and the strongest earnings growth in four years. And since earnings surprises during the third quarter were so strong, the analyst community is now revising their earnings estimates higher in anticipation of a stunning fourth quarter announcement that will commence in late January. Bottom line, I want you to hang on and enjoy the ride. I expect a strong finish to 2025 and a surge in the stock market in January, which is a seasonally strong month. In fact, I expect the bull market to persist well into 2026. But I want to add one important word of caution. The market in 2026 won’t be a market where all stocks benefit. In fact, it will look more like a major wealth transfer – money leaving certain sectors and flooding into others, quietly and methodically. That’s why you’re seeing some strange contradictions right now. Tech CEOs are selling shares of their own AI companies. Billionaires are raising cash and adding to gold. At the same time, the federal government is committing trillions of dollars toward AI-related infrastructure, especially power, data centers and the systems needed to support them. Those things don’t happen in isolation. They tell me capital is being repositioned – not broadly, but selectively. Some stocks will continue to do very well. Others will struggle or fail outright. And the difference won’t come down to headlines or narratives. It will come down to where institutional money is actually flowing. That’s exactly what my quantitative system is designed to track. Right now, my Growth Investor stocks are fundamentally superior and showing the kinds of signals institutions look for when they deploy capital. On average, they’re characterized by 28% average annual sales growth and 93.8% average annual earnings growth. In the most recent quarter, the average earnings surprise was 12.1% – and analyst earnings estimates have been revised about 9% higher over the past three months. That combination – accelerating fundamentals, upside surprises and rising estimates – is what tends to put stocks on the right side of a wealth transfer. I’ve just released a new presentation that explains why I believe this market is entering a very different phase, how AI is reshaping capital flows far beyond just tech stocks and how investors can see where institutions are positioning before it becomes obvious. If you want to understand what’s really happening – and how to avoid being stuck on the wrong side of this shift – you can learn more here. Sincerely, | .png)
.png)
No comments:
Post a Comment