There are cracks forming in the façade of the stock market right now. The best and brightest stocks of the last few months are now tumbling down. The risks are mounting, from tariffs to stubborn inflationary data, the market is becoming more discerning. You can’t just blindly buy every AI name you see and expect to print money. The proverbial you-know-what seems to have hit the fan. But…that creates opportunities for astute investors. Your patience is about to pay off, big time!
My typical routine is to dig through dozens of charts, looking for some hints as to what is to come. Since last Wednesday, I haven’t liked what I’ve been seeing. There’s the bust up of the high-beta names like Palantir, Hims and Carvana, but frankly, the market had been chomping at the bit for that to happen.
Beat-and-raise earnings reports have frequently been met with selling. Or you get something like Hims the other night where it misses by a penny and they take it down 22%. That wasn’t a stock up at all-time highs that was waiting for a catalyst lower, either. It was a stock that had already been rocked.
Recent price action has been shaky. Even Wednesday the 26th, a day when the market looked to recover after a streak of losers, the market did not impress on its bounce back. The message is the same across all of the charts I’m seeing. There is weakness and we are in search of a bid that’s simply not showing up with any sort of conviction.
The good news is, there are reasons why the market looks the way it does. As these unknowns begin to settle down and subside, there will be some incredible opportunities. You just have to have the right tools at your disposal to find the diamonds in the rough.
Tariff Talk
President Trump threatened to impose a 25% tariff on all imports from Canada and Mexico unless they take strong steps to curb illegal immigration and drug trafficking, especially fentanyl, at their borders.
His administration has already implemented a 10% tariff on Chinese goods, and he has suggested that if China doesn’t address issues like drug flows and intellectual property concerns, those tariffs could be increased further.
Trump has also vowed to impose tariffs on any country that taxes U.S. exports, effectively promising a tit-for-tat strategy to push trading partners toward concessions. These are aimed at Europe especially. One major example of this is the 10.5% tariff the EU imposes on US automobiles. Trump has already threatened Europe with a 25% tariff on European autos starting April 1st.
Some stocks will be hit harder by tariffs than others. We have a way to know which stocks can take the heat, and which stocks will continue to come under pressure.
Keep reading . . .
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Deadline Approaching: Zacks 7 Best Stocks for March
From 220 Zacks Rank #1 Strong Buy stocks, our experts hand-picked these 7 compelling companies as the most likely to spike NOW. While we can’t guarantee 100% success, they are likely to jump sooner and climb higher than any others you could buy this month.
Report distribution is limited, so don’t miss out. The deadline is Sunday, March 2nd.
Hurry – See Stocks Now >>
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Stubborn Inflation
Surveys like the University of Michigan’s monthly survey have shown a noticeable jump in consumer inflation expectations. This implies that households anticipate prices will continue to rise, which can itself fuel further price increases as businesses preemptively pass on higher costs.
Of course, the biggest of the inflation reports is the CPI, the Consumer Price Index. January’s headline number came in 47 bps higher month-over-month. Core CPI, which is the CPI for all items minus food and energy, increased 40 bps, leading to a year-over-year number of 3.3%. The shelter index component, accounting for housing costs, increased 4.4% in the past year, while motor vehicle insurance spiked 11.8%.
Inflation is not categorically bad across the board for all stocks in the universe. In fact, there are several industries which actually benefit from the bump up in inflation.
S&P 500
Image Source: TradingView
Technically, Wednesday, February 26, 2025 will go down as an up day for the S&P 500 but there was nothing bullish about it. The recovery stalled out when the index butted its head against the 50-day moving average. Sellers were camped out there and smacked the index down. We may have finished above Tuesday’s close but the damage was done. I’m expecting a further drawdown, with a probe below the early January lows, possibly getting to the 200-day moving average.
There will certainly be short-term bounces here but I don’t think the S&P 500 is going to be range bound. That’s something we’ve seen on the Dow recently, but the tugging of the small caps and high beta names is likely going to spill over.
Individual Darlings
The most recent darlings of the market, the AI-stack, have been cut down from their heights. There are countless names in this space and other tech-related areas which were once propelling the market higher and are now 10%, 20% or even 30% off.
There are several names that come to mind in the “AI-stack” that fell victim to Mr. Market recently. This list includes Palantir, Tempus AI and Vertiv just to name a few. These were all once high-flying, untouchable stocks that have come back down to Earth.
The Power of the Zacks Rank
Here’s the good news for long-term investors… a lot of great stocks are on sale and we may potentially see more fantastic deals in the near future. But how do find stocks that have a real shot at significant outperformance?
The Zacks Rank is a great place to start. Stocks rated highly by the Zacks Rank have the strongest underlying earnings trends. Buying these stocks on dips can put the odds strongly in your favor. Short-term market fluctuations happen at a much greater frequency than a reversal of an earnings trend. Especially when short-term fluctuations are caused by something like tariffs. That means investors can use them to find stocks that stand to profit – and continue to profit – despite what’s happening with the global political landscape.
Zacks has just released a brand-new Special Report, 7 Best Stocks for the Next 30 Days, and you're invited to be one of the first to see it.
Our team of experts combed through the latest Zacks Rank #1 Strong Buys and handpicked seven exciting companies poised for significant price increases. They're likely to jump sooner and climb higher than any other stock you could buy this month.
Today, you can access to the 7 Best Stocks report for just $1. When you do, you'll also get 30-day access to all of Zacks' private portfolios for the same dollar.
I encourage you to take advantage right away. The earlier you get in, the greater profits you stand to make. But don't delay. We're limiting the number of investors who share our 7 Best Stocks, so this opportunity ends at midnight Sunday, March 2.
Download 7 Best Stocks for the Next 30 Days and check out Zacks' portfolios for just $1 >>
Good Investing,
David Bartosiak
Dave Bartosiak is Zacks' resident momentum trading and earnings surprise expert. As the manager of two portfolio services, he selects fast-moving stocks and delivers commentary to help investors identify emerging opportunities with significant upside potential.
Image: Bigstock
Finding Opportunities in This Shifting Market
There are cracks forming in the façade of the stock market right now. The best and brightest stocks of the last few months are now tumbling down. The risks are mounting, from tariffs to stubborn inflationary data, the market is becoming more discerning. You can’t just blindly buy every AI name you see and expect to print money. The proverbial you-know-what seems to have hit the fan. But…that creates opportunities for astute investors. Your patience is about to pay off, big time!
My typical routine is to dig through dozens of charts, looking for some hints as to what is to come. Since last Wednesday, I haven’t liked what I’ve been seeing. There’s the bust up of the high-beta names like Palantir, Hims and Carvana, but frankly, the market had been chomping at the bit for that to happen.
Beat-and-raise earnings reports have frequently been met with selling. Or you get something like Hims the other night where it misses by a penny and they take it down 22%. That wasn’t a stock up at all-time highs that was waiting for a catalyst lower, either. It was a stock that had already been rocked.
Recent price action has been shaky. Even Wednesday the 26th, a day when the market looked to recover after a streak of losers, the market did not impress on its bounce back. The message is the same across all of the charts I’m seeing. There is weakness and we are in search of a bid that’s simply not showing up with any sort of conviction.
The good news is, there are reasons why the market looks the way it does. As these unknowns begin to settle down and subside, there will be some incredible opportunities. You just have to have the right tools at your disposal to find the diamonds in the rough.
Tariff Talk
President Trump threatened to impose a 25% tariff on all imports from Canada and Mexico unless they take strong steps to curb illegal immigration and drug trafficking, especially fentanyl, at their borders.
His administration has already implemented a 10% tariff on Chinese goods, and he has suggested that if China doesn’t address issues like drug flows and intellectual property concerns, those tariffs could be increased further.
Trump has also vowed to impose tariffs on any country that taxes U.S. exports, effectively promising a tit-for-tat strategy to push trading partners toward concessions. These are aimed at Europe especially. One major example of this is the 10.5% tariff the EU imposes on US automobiles. Trump has already threatened Europe with a 25% tariff on European autos starting April 1st.
Some stocks will be hit harder by tariffs than others. We have a way to know which stocks can take the heat, and which stocks will continue to come under pressure.
Keep reading . . .
------------------------------------------------------------------------------------------------------
Deadline Approaching: Zacks 7 Best Stocks for March
From 220 Zacks Rank #1 Strong Buy stocks, our experts hand-picked these 7 compelling companies as the most likely to spike NOW. While we can’t guarantee 100% success, they are likely to jump sooner and climb higher than any others you could buy this month.
Report distribution is limited, so don’t miss out. The deadline is Sunday, March 2nd.
Hurry – See Stocks Now >>
------------------------------------------------------------------------------------------------------
Stubborn Inflation
Surveys like the University of Michigan’s monthly survey have shown a noticeable jump in consumer inflation expectations. This implies that households anticipate prices will continue to rise, which can itself fuel further price increases as businesses preemptively pass on higher costs.
Of course, the biggest of the inflation reports is the CPI, the Consumer Price Index. January’s headline number came in 47 bps higher month-over-month. Core CPI, which is the CPI for all items minus food and energy, increased 40 bps, leading to a year-over-year number of 3.3%. The shelter index component, accounting for housing costs, increased 4.4% in the past year, while motor vehicle insurance spiked 11.8%.
Inflation is not categorically bad across the board for all stocks in the universe. In fact, there are several industries which actually benefit from the bump up in inflation.
S&P 500
Image Source: TradingView
Technically, Wednesday, February 26, 2025 will go down as an up day for the S&P 500 but there was nothing bullish about it. The recovery stalled out when the index butted its head against the 50-day moving average. Sellers were camped out there and smacked the index down. We may have finished above Tuesday’s close but the damage was done. I’m expecting a further drawdown, with a probe below the early January lows, possibly getting to the 200-day moving average.
There will certainly be short-term bounces here but I don’t think the S&P 500 is going to be range bound. That’s something we’ve seen on the Dow recently, but the tugging of the small caps and high beta names is likely going to spill over.
Individual Darlings
The most recent darlings of the market, the AI-stack, have been cut down from their heights. There are countless names in this space and other tech-related areas which were once propelling the market higher and are now 10%, 20% or even 30% off.
There are several names that come to mind in the “AI-stack” that fell victim to Mr. Market recently. This list includes Palantir, Tempus AI and Vertiv just to name a few. These were all once high-flying, untouchable stocks that have come back down to Earth.
The Power of the Zacks Rank
Here’s the good news for long-term investors… a lot of great stocks are on sale and we may potentially see more fantastic deals in the near future. But how do find stocks that have a real shot at significant outperformance?
The Zacks Rank is a great place to start. Stocks rated highly by the Zacks Rank have the strongest underlying earnings trends. Buying these stocks on dips can put the odds strongly in your favor. Short-term market fluctuations happen at a much greater frequency than a reversal of an earnings trend. Especially when short-term fluctuations are caused by something like tariffs. That means investors can use them to find stocks that stand to profit – and continue to profit – despite what’s happening with the global political landscape.
Zacks has just released a brand-new Special Report, 7 Best Stocks for the Next 30 Days, and you're invited to be one of the first to see it.
Our team of experts combed through the latest Zacks Rank #1 Strong Buys and handpicked seven exciting companies poised for significant price increases. They're likely to jump sooner and climb higher than any other stock you could buy this month.
Today, you can access to the 7 Best Stocks report for just $1. When you do, you'll also get 30-day access to all of Zacks' private portfolios for the same dollar.
I encourage you to take advantage right away. The earlier you get in, the greater profits you stand to make. But don't delay. We're limiting the number of investors who share our 7 Best Stocks, so this opportunity ends at midnight Sunday, March 2.
Download 7 Best Stocks for the Next 30 Days and check out Zacks' portfolios for just $1 >>
Good Investing,
David Bartosiak
Dave Bartosiak is Zacks' resident momentum trading and earnings surprise expert. As the manager of two portfolio services, he selects fast-moving stocks and delivers commentary to help investors identify emerging opportunities with significant upside potential.