Markets Nearing Crash Territory? AI Suggests These Stocks & ETFs

What happened this Thursday? Fed Chairman Jerome Powell announced that there will be no policy changes and re-emphasized the Federal Reserve’s openness to temporarily tolerate inflation levels that exceed 2%. The result of this meeting led investors to sell off shares of tech stocks and bonds. The Nasdaq has officially entered correction territory, but the market is still nowhere near March lows. While the stock market hasn’t necessarily crashed, it is still extremely volatile. Here what our models are saying. 

Before we dive into this week's trades, we want to share a very exciting update on the AI Investor platform. We created the platform to be an easy to use tool that speeds up the research process and helps you discover actionable and valuable investment ideas. So how are we doing so far? Here are the results of the feedback from some early users (As of March 5, 2021). Over 70% of the users agree that the platform is easy to use. Over 57% of the users agreed that the platform has accelerated their investment research process. Most importantly, over 85% of the people traded on the ideas shared on the platform and nearly all of them find the recommendations useful.

We created the AI Investor platform for subscribers of this newsletter. Hundreds of subscribers from this newsletter have already claimed their early access to the Forbes AI Investor research tool. Tired of spending hours finding what stocks and ETFs to trade? Forbes AI investor is the easiest way to discover your next investment. As a subscriber to this newsletter, you get early access! Sign up here to try it for free for one month. Cancel anytime!

With the help of AI, we have identified a selection of stocks that investors would not be foolish for buying. Heartland Financial Usa Inc (HTLF) is a Top Buy for next week. It recently broke a new 52-week high and is currently trading positive on the year by almost 10%. Our AI has assigned Q-Factor Scores of D in Technicals, A in Growth, B in Low Volatility Momentum and B in Quality Value. 

National Vision Hldgs Inc (EYE) and Silgan Holdings Inc (SLGN) are also rated Top Buy for next week. National Vision received scores of C in Technicals, B in Growth, C in Low Volatility Momentum and B in Quality Value while Silgan Holdings scored C in Technicals, B in Growth, A in Low Volatility Momentum and B in Quality Value.

There are two stocks rated Top Short for both the next week and 30 days. The first is Tripadvisor Inc (TRIP), which has been assigned factor scores of F in Technicas, F in Growth, D in Low Volatility Momentum and F in Quality Value. The second is Bluegreen Vacations Hldg Crp (BVH), which has received scores of D in Technicals, D in Growth, D in Low Volatility Momentum and F in Quality Value. 

For the next month, Aflac Inc (AFL) is a Top Buy. The insurance company gained ground with investors after it announced impressive earnings. Its current YTD performance is up over 6%.  The final Top Short for the next 30 days is Hess Corp (HES). Earlier this week, Hess announced that it will start paying quarterly dividends to investors, effective March 31. This will not apply to shareholders who bought the stock after March 17, 2021. At this time Hess Corp is trading positive on the year by over 20%. That could be why it is on our list of Top Shorts instead of Top Buys.

For the second week in a row, our AI has assigned a Top Buy rating to 3D Printing (PRNT). An excellent pick for investors looking to add diversification to their portfolio, this ETF is expected to hold this rating for the next month. It’s more common for our AI to give precious metals Top Buy ratings, but this week is not the case. According to AI models, SPDR Gold Trust (GLD) will be a Top Short for the next week.

ARK Genomic Revolution (ARKG) is the only ETF to receive a Top Buy rating for the next week and month. For next week, ProShares Ultra Bloomberg Crude Oil (UCO) and SPDR Bloomberg Barclays High Yield Bond (JNK) are rated Top Buy. Energy has consistently made it on our list of top ETFs to buy while many bonds have received the opposite treatment. Following the sharp selloff on Thursday, the price of bonds have decreased, so this could be why our AI models suggest now is an ideal time to buy. 

Some of our favorite options trades this week: 

Short Call Spread in Hess (HES) - Top short idea for this week.  Offers a very attractive income/yield opportunity for investors looking to introduce alternative forms of income in their portfolio.  As a whole, our models suggest the Energy sector is short-term overbought.

Short Call Spread in Western Digital (WDC) - Another top short idea for this week.  Income/yield trade that takes advantage of rotation out of tech stocks with elevated volatility levels.

Long Call Spread in iShares 20+ Year Treasury Bond ETF (TLT) – Attractive rated ETF trade idea which we believe is primed for a potential short squeeze following the recent rally in rates.  Attractive payout potential buttresses risk/reward of trade. 

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Performance Update

It was a good start to the year for our AI models. Our monthly top buys for stocks have outperformed the SPDR S&P 500 ETF by over 27% since December 2013, generating a total return of 157%. In January, our top buys were up 1.37% vs -1.02% for the SPY ETF.† You can find this full list of monthly top buys for stocks and ETFs in a simple and easy to understand table on the AI Investor Investment Discovery platform. Sign up here to try it for free for one month.

The Latest

Across all sectors, we put our AI to work and generated a list of the top stocks to buy for the month of March. 

This month, our AI has selected the following ETFs – all of which received a Top Buy rating. This is across several sectors, including dividend, tech, growth, value and consumer.

†As of 1/31/2021. The calculated returns above are based on paper trades and back tests during the relevant measuring period and therefore represent hypothetical performance. The average holding period for each security is 1 month with the return calculation assuming an equally-weighted theoretical portfolio. Returns reflect full reinvestment of dividends. The hypothetical returns do not include advisory fees or transaction costs as Qai does not maintain an investment advisory business and has no assets under management. However, an investor paying a professional advisor would have its return affected by any fees or commissions paid. Past performance is not an indication of future returns. Changes in economic conditions and market factors will affect the returns of investments in different ways. Any investment involves a risk of a loss. All information herein is from sources believed to be reliable but have not been independently verified. No representation or warranty can be given with respect to the accuracy or completeness of the information, and is subject to updating, revision, and amendment. Hypothetical returns are shown against the actual returns for the SPRD S&P 500 ETF Trust (SPY) during comparable periods. The strategy is based on buying an equal amount of all stocks ranked as Top Buys by the Q.ai Factor Models for US Large-Cap Stocks (and an identical back tested strategy employed in the earlier stages of the measuring period January 1, 2017 through January 31, 2021). The Q.ai Factor Models are calibrated to focus on capital appreciation. Q.ai is the trade name of both Quantalytics Research, LLC and Quantalytics Holdings, LLC.