Elevated bond yields and geopolitical uncertainty continued to be negative for stocks this week as the overall market moved into oversold territory. However, that set us up to put cash to work and make four small buys as our discipline mandates. We also upgraded one of our tech giants after it reported a stellar quarter but saw its stock punished. The 10-year Treasury yield went back above 5% this week after crossing that threshold for the first time since July 2007 on Oct. 19. While settling Friday slightly below 5%, bond yield volatility and concerns about the war in the Mideast have proven to be more powerful stock market movers lately than the solid earnings prints we’ve seen from several mega-cap tech companies. The closely followed S & P 500 Short Range Oscillator first flashed oversold Monday and went deeper and deeper into oversold territory as the week went along. Jim Cramer has used the Oscillator for decades to gauge sentiment swings in the market. It’s our practice to look for places to make small buys in oversold markets. (We conversely took at making trims during overbought markets). This week, we purchased shares in companies that had promising earnings but negative stock reactions or demonstrated positive catalysts on the horizon. Here is a day-by-day breakdown of the moves we made in our portfolio. Monday On Monday, we bought 75 more shares of Oracle (ORCL), which was up about 1% at the time. We were taking advantage of the unwarranted 6% drop in the stock on Oct. 20 following the company’s AI Executive Forum event. Investors were encouraged by the enterprise software company’s positive comments on artificial intelligence spending. ORCL YTD mountain Oracle YTD However, shares fell on worries that cash flows from AI workloads would be further out in the future. The lack of immediate revenue upside from AI also caused Oracle shares to drop 13.5% on Sept.12, the day after it reported earnings. Given the company’s fundamentals are intact and there’s strong sustained demand for its AI services, we saw the pullback as a buying opportunity. Tuesday We used Tuesday’s post-earnings sell-off in Danaher (DHR) shares to add 30 more shares to our position. While the life sciences giant beat on the top and bottom lines, the stock faltered due to uncertainty around the recovery in its key bioprocessing business. DHR YTD mountain Danaher YTD Still, we felt confident buying more DHR because stocks tend to bottom before their industry cycle does, and Danaher is almost there in working through the excess supply that is limiting new order demand. Danaher’s inflection point is coming. It may be a quarter or two away, which is why we think buying the stock lower now is a good opportunity. We see substantial growth ahead in the biologics market and see a better setup for the sock in 2024. Wednesday On Wednesday, we made a small purchase of 20 more shares of Constellation Brands (STZ), buying the recent dip on higher interest rates and concerns…
Read More: We had a busy week of trades in an oversold market. Here’s the day-by-day
