If it's real, if this market is for real, then there are some stocks that better start doing something, because they represent the fundament of a real bull market and not just some short-covering rally.
Here's 10 stocks that have to start doing better to convince believers that there is something that can happen here that might be lasting.
1) Action Alerts PLUS portfolio holding Alphabet (GOOGL) , down more than 7% for the year. This company, which sells at only 21x earnings, with an amazing balance sheet and unlimited potential given its massive $73 billion cash position, is perceived as one of those companies that's just lost its ability to generate any surprise other than a disappointing one.
There's been an endless, subtle string of number cuts for ages with Alphabet, and while it is pervasive and dominant, it's simply considered to be a company with its best growth in the past. I find that hard to believe, but it's not one that people push very often beyond a half-hearted reiterate buy. What people want to see more than anything is that Google is more than a search company. It's a media company with you, the people generating the media, via Youtube. I think something's wrong at Alphabet that they don't do more with this and I can't figure out it. Can you?
2) Apple (AAPL) . This one's worse than Google, in that even the bulls pretty much hate it because no growth stock ever comes out of the valley of the shadow guide-downs with its head or its multiple intact. The problem remains that Apple isn't likely to make this year's numbers, and yet almost every analyst still has a darned buy on it. Until you get the soft buys out of there -- something I have been saying for ages and have been right about -- there really is very little hope here. As goes Apple, so goes Qorvo (QRVO) , Skyworks (SWKS) , Cirrus Logic (CRUS) and to a lesser extent NXP Semiconductor (NXPI) and Broadcom (AVGO) .
3) Pick an airline, any airline. American Airlines (AAL) is down almost 30%, United's (UAL) declined 27%, Delta's (DAL) off 26%. Nobody is going to say we have a bull market, let alone a new bull market, with those kinds of numbers. The airlines simply have to put on a sustained advance if this market is going to do anything but be shutdown at resistance. This is not an impossible task. Southwest (LUV) is only down 5%. Hey, by the way, did you see Union Pacific (UNP) last week? WOW!
4) Starbucks (SBUX) . I don't know what to say about Starbucks, other than it has become so frustrating at this point and has been in no man's land so long, that you have to believe that unless there is a serious re-acceleration in earnings power this company, too, is going to be said to have its best days behind it. I don't believe that. I think that Starbucks is given to some serious growth spurts and then a rest. This is no different. Still, it's unnerving to see it stay at $55-$56 during this incredible run we have just had, and it makes me think that the talk of a slowing isn't off-base, even as my trust stays true to it.
5) Nike (NKE) . I know, it just reported and it's rallied nicely since the after-hours decline; but Nike, like Starbucks, is a senior growth stock that used to be like what we now expect from Johnson & Johnson (JNJ) ($122!), UnitedHealth (UNH) , Honeywell (HON) and 3M (MMM) , consistent growth that on every up move you get an all-time high. I think it's been held back by Sports Authority, but that the breaks are now coming its way and that the worries about a slowdown in North America are just way off base.
6) Visa (V) . I know it is too much to ask any of the bank stocks to rally to new highs although I think that they have based and are reflecting some real worst case scenarios given how strong the U.S. economy is, but Visa's stock got crushed, along with that of MasterCard (MA) , when an antitrust decision of some headline import, but not earnings import, got thrown out. Visa's the soft financial that the market likes to go to and its un-lovedness is a sign that not all is right here.
7) Target (TGT) . Here's another senior growth stock that has truly lost its ability to well, grow. And that means right now you just have a half dozen companies in retail that are doing well: Growth Seeker portfolio name Amazon AMZN, because it is knocking it out of the park, Walmart (WMT) , because the power of its scale is awakening -- including five days free shipping! -- Costco (COST) , because the credit card issue is behind it, TJX (TJX) because its discounts can't be Amazoned, and Home Depot (HD) -- amazing how that one came right back, isn't it?--and Lowe's (LOW) , which may be having weaker than expected seasons but don't sell a lot that can be Amazoned.
You need something else to work besides these, and I am looking at Target because it's huge and it was supposed to be the best of the department store/retailers, and right it feels like road kill. I'd put Macy's (M) in here, too, because it looks like it is ready to rally. But you get the point.
8) Gilead (GILD) . I am not trying to pick on any one biotech company and I could have easily selected Celgene (CELG) , but Gilead down 15% is truly an eyesore on this market. Everyone and his brother know that its Hep C franchise is no longer unique and it has all of this cash that does nothing. It has to do a deal to accelerate its growth... or else. If I had selected Celgene, I would say that it has to see some results of the Receptos buy soon. It just has to.
9) Allergan (AGN) . This is the one drug stock that caused people to lose a huge amount of money and it's all because the merger with Pfizer (PFE) didn't go through and the money from Teva (TEVA) for its generic drug business hasn't arrived yet. So, given that so many deals have been blasted apart by antitrust concerns, the worries are non-stop here, including the idea that maybe Allergan had to do a deal or its growth was going to slow. I think that this is the stock that's got the most expectations in it that could be realized, but I feel real lonely about it.
10) Disney (DIS) . This is the most troubling stock in the market right now because as, Eric Jhonsla pointed out last week, the Skinny Bundle's not going away. The issue with Disney is not "Is ESPN slowing," because it is, but will the bears be right that the cost of ESPN to the cable companies is going to start shrinking? That would have repercussions that would swamp Shanghai Disney, as well as the fabulous film franchises. This stock's got to find its way back into the $100s to show the overall strength of this move.
Now, there are plenty of other things wrong with this market. We are going to get bank earnings this week, and as I said they will be ugly, but how ugly? We know that numbers can easily come down for any company connected with Europe. We totally get that most of tech and most of finance isn't exactly hitting it out of the market, and that represents a plurality in the stock parliament. I could also argue that you need to see a stock like Netflix (NFLX) go higher or one like Facebook break out to all-time highs, or a company like General Electric (GE) hit mid $30s and leave this level behind.
But it is these stocks, these 10 that speak volumes about why it is understandable that someone could say OK, we have had our post-Brexit rally but it hasn't hit home, or won't hit home until these 10 stocks do something, something that makes them stand out as stocks you want to own not avoid, ones that you want to champion, not worry about.
Can it happen? With good earnings, yes. Without them, we're just not going to break out to levels that resemble what a bull market represents to the vast majority of observers, including yours truly.