Editor’s Note: Walter Gault is this week’s author. David Brown will be back next week.
The S&P 500 closed just below its open, making for a roughly break-even trading session. There were no market moving events today besides the on-going debt ceiling debate between Congress and the President. However, there are a number of important economic releases on tap this week worthy of your attention. Producer Price Index, Retail Sales, and Business Inventories are tomorrow; Consumer Price Index, Industrial Production, and Housing Market Index are on Wednesday; and Housing Starts and Consumer Sentiment finish up the week.
Here are the Market Stats.
Apple (AAPL) was down over 3% today on media reports that it’s cutting orders for iPhone 5 parts for the current quarter due to weaker-than-expected demand. While its valuation remains very reasonable, it might be worth waiting until after its earnings announcement to see how the quarter turns out; or sell some puts with the intention of getting long but with the additional protection from another drop.
In another interesting turn of events, Dell (DELL) may go private soon. Some are calling this potentially one of the largest buyouts ever.
Five of six of the nation’s largest banks are scheduled to report fourth-quarter earnings results this week, making a heavy week for the Financials sector. JPMorgan (JPM) and Goldman Sachs (GS) report on Wednesday morning, followed by Citigroup (C) and Bank of America (BAC) on Thursday, and Morgan Stanley (MS) on Friday. Wells Fargo (WFC) was the first big bank to report last week, posting profit and revenue above estimates, but raising concerns about net interest margins.
We’ve long said that skeletons remain in the closet of big banks, as there are still big mortgages and big loans whose value hasn’t been realized. If you’re interested in the Financials sector, consider Blackstone Group (BX), Apollo Global Management (APO) or Kohlberg Kravis Roberts & Co. (KKR). All have attractive valuations and great projected EPS growth.
4 More Stock Ideas for this Market
This week, I selected four highly ranked stocks with great projected EPS growth and value for you to consider. I paid particular attention to the Healthcare sector, ranked the highest by our forward-looking SectorCast model.
Seagate Technology (STX) — Technology
JetBlue Airways Corporation (JBLU)—Industrials
United Healthcare Therapeutics Corporation (UTHR)—Healthcare
Celgene Corporation (CELG)—Healthcare
