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Sunday Watchlist

July 7th, 2019

In a holiday-shortened week, markets continued to push higher.

In fact, the Dow Jones Industrial Average is now perched at an all-time high just under 27,000.  Part of the reason for that is cooling trade tensions with China. President Trump has noted his meeting with Chinese President Xi Jinping had been “excellent” and that the relationship with China was “right back on track” as quoted by The Guardian.

While our fingers are crossed for a long-lasting deal, new tensions with the European Union (EU) are boiling.  In fact, Trump just said he could add tariffs on $4 billion of EU goods, covering 89 products including meat, cheese, pasta, fruits, coffee, and whiskey.  

All as the U.S. remains locked in a dispute with the EU over two of the world’s biggest airplane manufacturers – Boeing and Airbus.  The additions to the list are “in order to enforce U.S. rights in the World Trade Organization (WTO) dispute against the European Union (EU) and certain EU member States regarding EU subsidies on large civil aircraft,” according to the Office of the U.S. Trade Representative.

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

Opportunity No. 1

Marathon Oil (MRO)

While MRO has sunk along with oil, the pullback to a 52-week low offers us a great long-term buying opportunity. Interesting to note, even at $45 a barrel, MRO can still generate enough cash to pay its dividend and fund the drilling of new wells.  It’s even been buying back shares, and is likely to continue doing so for quite some time. From here, we’d like to see MRO bounce back to at least $19, near-term.

Opportunity No. 2

Advanced Micro Devices (AMD)

The stock is pushing even higher now after analysts at Nomura initiated the stock with a buy rating and a $33 price target.  The firm believes strong revenue growth and improving profitability can send the stock even higher. Plus, it may be gaining much more market share from others, like Intel, given the impressive performance of its new Ryzen processor. 

Opportunity No. 3

Cree Inc. (CREE)

The latest pullback to less than $59 now appears overdone. As the stock consolidates we’d like to see a near-term break higher to $70 highs. Another reason for the CREE pullback in recent weeks was a profit and sales outlook, which was driven by the Huawei ban. However, now that the ban is off the table, it should help boost stocks like CREE moving forward.