January 20, 2017
Today, Donald Trump will take the oath of office, becoming the 45th President of the United States. Inauguration Day kicks off a new era for the country, both on Main Street and on Wall Street.
So, over the past few days, I've posted a special Presidential series. On Wednesday, I offered my predictions for 2017 and beyond. On Thursday, I identified four winners of the Trump era, including top stock picks from Blue Chip Growth, Emerging Growth and Dividend Growth.
Today, I'll discuss the other crucial side of investing: The stocks and sectors that should be sold for now. And what I'm about to say may surprise you.
In the weeks following Election Day, there were several sectors that rallied strongly, including financials, industrials and materials. However, much of this rally was fueled by short-covering, so it wasn't sustainable. So while there was a lot of hype surrounding these sectors, I largely recommend that you avoid these sectors in 2017.
The reason why is simple: All of these sectors are characterized by lackluster or negative earnings and sales growth. In fact, many market bellwethers missed earnings estimates in the latest quarter—and barely 15% of mega-cap stocks have solid fundamentals. And that's not going away any time soon.
Many multinational companies will continue to struggle to keep their heads above water in the first few quarters of 2017. And that's because of the strong U.S. dollar. The fact is that the U.S. dollar is at the highest level against the euro in over a decade, and it's also rising against the British pound and the Japanese yen. As a result, the U.S. dollar is wreaking havoc on multinationals' top and bottom lines.
Over the past few weeks, big multinationals in the financial, industrial and material sectors have pulled back, as Wall Street realized these companies didn't have the fundamentals to support their yearend surge higher…
So my advice to you is to ignore the recent rally in financial, industrial and material stocks. In fact, my Portfolio Grader system has identified 49 stock market giants that you should sell immediately. Consider the list below. Cross-check with your own portfolio. And if you own any of these losers, sell immediately because they have the potential to blow a hole in your portfolio this year.
|24 Financial Stocks to Avoid|
|ALLY||Ally Financial Inc||D||C||D|
|AMG||Affiliated Managers Group Inc.||F||C||D|
|AMP||Ameriprise Financial Inc.||D||D||D|
|BBVA||Banco Bilbao Vizcaya Argentaria||D||C||D|
|CIT||CIT Group Inc.||D||D||D|
|CS||Credit Suisse Group AG||F||C||F|
|FNF||Fidelity National Financial Inc.||D||C||D|
|HSBC||HSBC Holdings plc||D||D||D|
|IBN||ICICI Bank Limited||D||C||D|
|LYG||Lloyds Banking Group plc||F||D||F|
|NYCB||New York Community Bancorp Inc.||D||C||D|
|RBS||Royal Bank of Scotland Group plc||F||C||F|
|UBS||UBS Group AG||D||C||D|
|VOYA||Voya Financial Inc.||D||D||D|
|WFC||Wells Fargo & Company||F||C||D|
|WLTW||Willis Towers Watson Plc||F||D||D|
|XL||XL Group Ltd||F||D||D|
|15 Industrials Stocks to Avoid|
|CEA||China Eastern Airlines Corp.||D||C||D|
|DAL||Delta Air Lines Inc.||D||C||D|
|GE||General Electric Company||F||C||D|
|JBLU||JetBlue Airways Corp.||F||C||D|
|NLSN||Nielsen Holdings Plc||F||C||F|
|RHI||Robert Half International Inc.||F||C||D|
|ROP||Roper Technologies Inc.||D||C||D|
|RYAAY||Ryanair Holdings Plc||D||C||D|
|ST||Sensata Technologies Holding||F||C||D|
|7 Materials Stocks to Avoid|
|CF||CF Industries Holdings Inc.||D||F||D|
|IFF||International Flavors & Fragrances Inc.||D||C||D|
|POT||Potash Corp. of Saskatchewan Inc.||D||D||D|
|PPG||PPG Industries Inc.||F||D||F|
I hope you have enjoyed reading this special three-part series on investing in the Trump era. As we learn more about what changes are in store at the White House, I will continue offering my guidance through this daily blog, and through my premium newsletters. In the meantime, I hope you have a wonderful weekend, and I'll be back online on Monday morning with your latest Portfolio Grader upgrades and downgrades.