Reload Your Portfolio with A-Rated Stocks

While January was a very strong month for the stock market, with the S&P 500, Dow and NASDAQ rallying 6.2%, 2.8%, and 10.7%, respectively, the same can’t be said for February. The S&P 500, Dow and NASDAQ ended the month down 2.6%, 4.2% and 1.1%, respectively.

March has also gotten off to a choppy start, but I wouldn’t worry. The reality is Wall Street is still recovering from the latest round of economic data that has shown that inflation may be sticking around for a little bit longer than we anticipated. This almost guarantees that the Federal Reserve will continue to raise key interest rates.

I should also add that March is a historically strong month for stocks – the S&P 500 has averaged a 0.5% gain in March since 1928. And right now, there is not a lot of news out there to warrant big broader market swings.

With that said, we did receive some lackluster economic data this week, so in today’s Market 360, we’ll take a brief look at two economic reports. And I’ll share where you can put your money in this market environment…

What This Week’s Numbers Tell Us

Yesterday, the Institute for Supply Management (ISM) released its index of U.S. manufacturing numbers.  According to the report, U.S. manufacturing activity rose slightly to 47.7 in February – up from 47.4 in January. This was mostly in line with estimates of 47.6.

However, a reading below 50 indicates weak manufacturing numbers. Yesterday’s reading marks the fourth-consecutive month of contraction.

Digging a little deeper, both new order and output numbers were down.

Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee, said, “The February composite index reading reflects companies continuing to slow outputs to better match demand for the first half of 2023 and prepare for growth in the second half of the year.”

So, we are in a manufacturing recession.

That’s the bad news.

The good news is that home prices are still dropping.

With high mortgage rates weighing on the housing market, home prices rose 5.8% year-over-year in December 2022, compared to 7.6% in November of last year. As reported by CNBC, “For all of 2022, the 5.8% price gain was the 15th best performance in the index’s 35-year history, but was well below 2021′s record-setting 18.9% gain.”

S&P Dow Jones Indices managing director Craig J. Lazzara said:

The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.

Apartment rents are falling too.

According to my favorite economist Ed Yardeni, Owners’ Equivalent Rent (OER) has leveled off in the past five months through January. Why this moderation in OER has not showed up in the Consumer Price Index (CPI) yet is frustrating. But as soon as we have evidence of moderating rental and home prices, inflation will cool off fast, and that should trigger a big stock market rally.

In the meantime, the best defense is a good offense – a portfolio stacked with fundamentally superior stocks.

Time to Reload with A-Rated Stocks

The fact is, we’re experiencing a very narrow market right now. My best advice is to only buy stocks that are A-Rated in my Portfolio Grader system.

In tomorrow’s Breakthrough Stocks Monthly Issue, I’m releasing six new buys – all companies that should prosper in this market over the next few months.

As I like to say, in the midst of market uncertainty, an investor’s best defense remains a strong offense of fundamentally superior Breakthrough Stocks. 

We remain in a 15% market when the top 15% of stocks in Portfolio Grader have emerged as the market leaders. The current environment is not ideal for indexing, so stock picking is crucial.

As a result, investors have to remain in the crème a la crème that dominates my Breakthrough Stocks Buy List!

To access tomorrow’s Breakthrough Stocks Monthly Issue the minute it’s released – including my six new stock recommendations – go here.

Sincerely,

Source: InvestorPlace unless otherwise noted

Louis Navellier

Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.

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