Is Political Uncertainty Responsible for 4% Drop in BUY Rated Stocks?
[Images: Hillary Clinton photo and Donald Trump photo, both by Gage Skidmore CC by SA 2.0]
Currently, there are 1,184 BUY rated stocks, down by 39 from just a week ago. That may not sound like a lot, but when you compare it to the weekly drop-off in BUY stocks last week—which was only 7 stocks—it’s significant. Overall, this means the BUY ratings range lost 46 stocks (3.7 percent) over the last two weeks.
Stocks with the HOLD recommendation decreased by 3, from 3,021 last Monday to 3,018 today. There were 5,300 SELL stocks today, up by 42 from 5,258 last Monday. Overall, most stock rating changes took place in the BUY and SELL ranges.
With such a significant drop, there are two major possibilities. Firstly, perhaps the economy is not as strong, and we are headed toward some hard times, despite the October jobs report showing a 4.9 percent reduction in unemployment. Secondly, this is an anomaly caused by considerable uncertainty surrounding the U.S. elections. At this stage, we do not know, but we shall be watching the data very carefully over the next two weeks.
There are 9,502 stocks rated by Weiss and below is their recommendation distribution.
Here are all stocks by investment rating. As you can see, the majority fall under the D rating (SELL) and only 1,184 are A or B rated (BUY) rated, representing 12.5 percent of the Weiss stock universe, down from 12.9 percent a week ago.