logo
  Join        Login             Stock Quote

What the Market Wants: The Devil You Know

 November 13, 2012 05:23 PM
 


(By Daniel Sckolnik) Lately we've been able to reduce the one thing the market does not want: uncertainty. With all due respect President Obama and Governor Romney, "the devil you know is better than the devil you don't know." Check off one big uncertainty. 

Third quarter earnings can be just about checked off.  Not quite as good as the first two quarters, especially on the revenue side, but definitely better than most expected. 

Europe caused the market some grief last week with lowered GDP for just about all Eurozone participants, including Germany, which was the biggest surprise when their expected growth in 2012 was lowered from 0.8% to 0.3%. Unlike six months ago, they now have President Draghi's innovative bond buying plan.  China is taking steps to halt their slowing growth as a new administration is appointed in the next week. Less uncertainty.

[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]

Sandy's fierceness is over, but the clean-up will take months if not years.  We grieve for those who lost loved ones or property in the storm, but the economy, while potentially facing a shortfall in Q4, will likely see increased numbers next year due to rebuilding of infrastructure and replacement of personal property and possessions.

Then there is the "fiscal cliff."  Anyone who paid attention to the elections knows that the citizens of this country will be closely watching how this key Congressional battle gets resolved. We cannot imagine a lack of solutions to this dilemma.  Parts of it may get kicked down the road, but I would wager that those making in excess of $250,000 better start planning on paying a higher capital gains tax. That simple fact probably explains much of Apple's weakness last week and weakness in other strong stocks over the past few years.

[Related -Apple Inc. (NASDAQ:AAPL): Why Gross Margins Will Expand In 2014 and Beyond?]

We believe selective buying of small- and mid-cap stocks in the Healthcare, Energy, and Financial sectors along with Housing industry (see last week's sector analysis) would be prudent for investors.  As usual, we strive to find undervalued companies with strong growth potential.  Hedge with either VIX or European related index puts.

Here are the market stats.

3 Stock Ideas for this Market

This week, I created in a custom search in MyStockFinder focused on value, growth, momentum and technical strength. Here are three you may find interesting:

AMN Healthcare Services, Inc. (AHS) — Healthcare

Flagstar Bancorp, Inc. (FBC)—Financial

Cardinal Financial Corp (CFNL)—Financial 

Full disclosure:  The author does not hold positions in any of the stocks mentioned in this article.

AHS, FBC, CFNLWhat the Market Wants
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageIntegrated Device Technology Inc. (IDTI) Q1 Earnings Preview: Another Beat and Pop?

Integrated Device Technology Inc. (NASDAQ:IDTI) will issue first quarter 2015 financial results on July 28, read on...

article imageHerbalife Ltd. (NYSE:HLF) Q2 Earnings Preview: The Potential To Shock?

Herbalife Ltd. (NYSE:HLF) will release its second quarter 2014 financial results after the close of trading read on...

article imageHealth Net, Inc. (HNT): Potential to Be Huge Winners Says Bank of America

As of this keystroke, Health Net, Inc. (NYSE: HNT) shares are up around 4% on the day. The managed health read on...

article imageHomeAway, Inc. (AWAY) Q2 Earnings Preview: Top and Bottom Line Bullish Surprise?

HomeAway, Inc. (NASDAQ:AWAY) will report its financial results for the second quarter ended June 30, 2014 read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.