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Sunday Watchlist

Week of July 22, 2019

Sometimes, there’s no pleasing investors.

At the moment, many are not so concerned if the Federal Reserve will cut rates.  Now, they’re concerned if they’ll cut by 0.25 or 0.5 percentage points. Remember, federal funds futures have been ramping up their odds for at least a half percentage point cut – part of the reason markets have found reason to rally recently.

However, it’s difficult to see how the central bank could lower rates by a half point with stocks at record highs, and new data pointing to a stronger than expected economy.  In fact, over the last few weeks, data has surprised to the upside. Unemployment now sits at 3.7% after the addition of 224,000 jobs in June 2019. Retail sales jumped 0.4% month over month, coming in better than expectations for 0.1%.  In addition, manufacturing output just increased 0.4%.

The only concern the Federal Reserve has at the moment is uncertainty over the trade war.

In short, the case for a half point cut doesn’t seem likely.  Instead, we’re likely to see a quarter, which could see some disappointment from investors.

As we wait to see what happens next, here are some of the top stocks to watch.

Opportunity No. 1

Upwork Inc. (UPWK)

With more than 57 million Americans working freelance jobs, UPWK stands to benefit.  And so far, so good. Gross services volume just increased 21% in its last quarter to $487 million.  Its core client list grew 22% year over year, and its retention rate was up 107%. Technically, after gapping lower in May 2019, the stock is just beginning to rebound and pivot higher.  We also believe the stock could refill its gap at $21, near-term with patience.

Opportunity No. 2

Curaleaf Holdings (CURLF)

With the latest, short-lived pullback in cannabis stocks, CURLF has become aggressively oversold.  And we believe now is a great time to accumulate shares, especially as we near the 2020 U.S. presidential election.  For example, President Trump said he would support bipartisan efforts in Congress to ease the federal ban on marijuana.  Sen.Elizabeth Warren has co-sponsored a bill to protect state legalization efforts and legalization at the federal level. Sen. Cory Booker introduced the Marijuana Justice Bill in the U.S. Senate.

Opportunity No. 3

Match Group Inc. (MTCH)

The last time we mentioned MTCH here, we noted, “Total quarterly earnings just jumped 14% year over year to $465 million.  Net earnings were up 23% to $123 million, or 42 cents a share from $99.7 million, or 33 cents a year earlier. With earnings and the stock trending higher, the stock is a solid investment, especially with rising interest in dating sites, such as Tinder, Match, PlentyOfFish, Meetic, OkCupid, and OurTime.”  

It traded at just $67.55.  The stock is now up to $76.57, and still offers great opportunity.  Earnings are scheduled for August 7, 2019 at 8:30am EST.