The Federal Reserve’s interest rate cut yesterday is the trigger we needed to re-enter our positions in the global stock markets. So today we are moving all of the stocks from our "watch" list back on to our "buy" list. I believe that the downside risk in the markets now is considerably more limited than at any other time in the last two months. And with the fundamentals of all of our global megatrends still intact, we can expect our Global Stock Investor picks to perform strongly as we move closer to the traditional fourth quarter rally in global markets.
Also, look for an exciting new pick in the October edition of Global Stock Investor, which we will be mailing out next week.
PORTFOLIO UPDATE
Anglo American (AAUK) rallied strongly this past week, and is now within striking distance of its previous high reached in July. I expect that our #1 play on the commodities supercycle will have a strong fourth quarter. For more insights on the recent sell off in the commodities sector, see my piece in the Global Guru. The stock is now a BUY. Place your stop at $23.50.
ABB Ltd. (ABB) won an order worth more than $400 million from German utility E.ON AG for power equipment to connect the world’s largest offshore wind farm to the German grid. Located more than 100 kilometers off the German coast in the North Sea, it will be the most remote wind farm in the world. Our play on the global infrastructure megatrend has plenty of wind in its sails. Now that the market has stabilized, it is a BUY. Place your stop at $19.50.
America Movil (AMX) has benefited from the unexpectedly rapid growth of total industry wireless subscribers in Brazil over the past few months. Monthly additions had increased 29.7% compared to the prior year as economic growth has re-accelerated in Brazil to 5.5% in Q2. With investors looking for a special dividend payout sometime in Q4, Carlos Slim’s baby is a BUY. Place your stop at $50.00.
iShare MSCI Swedish Index ETF (EWD) is recovering as the Swedish government continues its market-oriented reforms and moves ahead with the sale of its remaining stakes in over $90 billion worth of large Swedish companies. Through the Swedish ETF, you’re buying into Swedish companies such as telecom manufacturer Ericsson, truck maker Volvo and clothing retailer H&M. Let’s BUY the Swedish ETF at these levels, and place our stop at $31.50.
CurrencyShares Japanese Yen Trust (FXY) changed little in response to the rate cut by the Fed. This recommendation is a defensive hedge against potential market declines and is a BUY.
ICICI Bank (IBN) rallied more than 4% in Mumbai today as India’s benchmark Sensex index Wednesday rose more than 3% to cross the 16,000 mark for the first time ever, on the back of the Fed’s interest rate cut. The rupee also is strengthening against the dollar, which gives U.S. dollar-based investors an extra bit of return. "India’s Citibank" is a BUY. Place your stop at $35.50.
Millicom International (MICC) and the African cell phone megatrend were featured in last week’s Business Week. This remains one of my favorite long-term megatrends, and for those investors with a stomach for volatility, Millicom is a BUY. Place your stop at $50.00.
Arcelor Mittal (MT) is a giant steelmaker, whose stock price jumped to a record high, breaking through the $70 level for the first time yesterday. Last week, the company announced a new share buyback plan that calls for it to buy back and cancel up to 27 million shares, on top of the Sept. 4 completion of its $590 million stock repurchasing plan. The stock is a BUY. Place your stop at $52.50.
Tesco (TSCDY) is opening its very first stores in the United States as early as November. Tesco plans to have up to 50 stores launched by February 2008 in California, Nevada and Arizona, with the first opening to be in Southern California. Look for "Fresh & Easy" stores in Huntington Beach, Orange, Fullerton, Laguna Hills, Anaheim and Buena Park. Back home in the United Kingdom, Tesco’s share of the grocery market has risen to 31.7%. That’s almost twice the market share of its nearest rival, Wal-Mart owned ASDA. The stock is a BUY.
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