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Concerned About Last Week's Selloff? Here's 68 Things You Can Do.

January 27, 2014

Stock of the Day

There's no sugarcoating it—last week was the roughest week on Wall Street in over a year, as the S&P 500 dipped 2.6% and the Dow dropped 3.5%. The sharp turn on Wall Street filled my inbox with questions. What sparked the selloff? Should we be worried? And what can we do about it?

So today I'll answer these questions as well as give you 68 trade recommendations to help you smooth out any further volatility in your portfolio.

What caused the selloff?

On Thursday, it was announced that Chinese factory activity, as measured by the flash Markit/HSBC Purchasing Managers' Index, contracted in January for the first time in six months, pointing to a weak start for China's economy in the New Year.

The index was weighed down by weaker domestic and export demand, coming in at 49.6 in January compared with December's final 50.5 reading, dropping below the 50 line that separates expansion from contraction and sparking fears that China's economy may be at a tipping point.

Should we be worried?

I wouldn't be too concerned about this temporary dip. Despite the market's knee-jerk reaction, China's official PMI is almost always higher than HSBC's PMI and China's Lunar holiday is notorious for distorting economic statistics. In addition, even though China's annual GDP growth decelerated very slightly to a 7.7% annual pace in the fourth quarter, down from a 7.8% annual pace in the third quarter, domestic consumption continues to rise in China, which is helping to drive worldwide GDP growth.

What can we do about it?

I was out in the market last week, buying a number of stocks "on sale" for some of my other accounts—and I recommend that you do the same. I advise that you use the opportunity to add premium stocks that have pulled back, and I'll help you get started.

68 Recommendations Straight Out of Portfolio Grader

Upgrades

Last Week's Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
AAPL Apple Inc. B B
BBT BB&T Corporation B C
BEAM Beam Inc. B C
CHK Chesapeake Energy Corporation B C
COL Rockwell Collins Inc. B B
DFS Discover Financial Services B B
ETP Energy Transfer Partners, L.P. B C
FITB Fifth Third Bancorp B B
GD General Dynamics Corporation B C
MWE MarkWest Energy Partners, L.P. B D
NEE NextEra Energy Inc. B B

Last Week's Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
AES The AES Corporation D C
CLR Continental Resources Inc. D B
CPB Campbell Soup Company C C
DISCK Discovery Communications Inc. D C
EXC Exelon Corporation D B
GPS The Gap Inc. D B
HOT Starwood Hotels & Resorts Worldwide Inc. D B
JNPR Juniper Networks Inc. C B
KO The Coca-Cola Company D C
LINTA Liberty Interactive Corporation D C
MO Altria Group Inc. D B
RAI Reynolds American Inc. D B
SJM The J. M. Smucker Company C C
SWN Southwestern Energy Company C B
VRSK Verisk Analytics Inc. D B

Downgrades

Last Week's Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
ADP Automatic Data Processing Inc. C C
ADSK Autodesk Inc. C B
AON Aon plc C B
AV Aviva plc C B
BAC Bank of America Corporation C B
BIDU Baidu Inc. C B
BWA BorgWarner Inc. C B
CA CA Inc. C B
DD E. I. du Pont de Nemours and Company C B
DG Dollar General Corporation C B
DLTR Dollar Tree Inc. C C
JNJ Johnson & Johnson C C
KSS Kohl's Corporation C C
LVS Las Vegas Sands Corp. C B
MFC Manulife Financial Corporation C B
MHFI McGraw Hill Financial Inc. C B
MJN Mead Johnson Nutrition Company C B
PRU Prudential Financial Inc. C C
SNDK SanDisk Corporation C B
UPS United Parcel Service Inc. C C
VLO Valero Energy Corporation C B
WHR Whirlpool Corporation C B
YNDX Yandex NV C B

Last Week's Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
ABT Abbott Laboratories D B
AGN Allergan Inc. D B
AME AMETEK Inc. D B
APD Air Products and Chemicals Inc. D C
CSX CSX Corporation D C
EL The Estee Lauder Companies Inc. D C
GE General Electric Company D C
HAL Halliburton Company D C
ISRG Intuitive Surgical Inc. F C
ITW Illinois Tool Works Inc. D C
JPM JPMorgan Chase & Co. D C
LB L Brands Inc. D C
PH Parker-Hannifin Corporation D C
RCL Royal Caribbean Cruises Ltd. D C
ROST Ross Stores Inc. D C
SDRL Seadrill Ltd. F B
SLB Schlumberger NV D B
SLF Sun Life Financial Inc. D C
SWK Stanley Black & Decker Inc. D C

Sincerely,

Louis Navellier

Louis Navellier

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