Blue-chip stocks to sell might seem odd, especially in a year with rising corporate earnings, a U.S. presidential election and possibly three rate cuts. However, stock investors must stay watchful, especially with the S&P 500 and Dow Jones Industrial Average up 10% and 4.7%, respectively, far from a bull run.
J.P. Morgan analysts expect poor global growth, inflation and geopolitical concerns to hurt the stock market this year. Analysts think a worldwide recession is possible, but high interest rates and geopolitical upheavals make them skeptical of riskier ventures.
Elections in 2024 make things even less assured. This year started better than most election years, which could imply better things throughout the year, but you will never know which way the stock markets will react to the election, which is why looking for blue-chip stocks to sell is important.
IBM (IBM)
IBM (NYSE:IBM) is up against tough competition in the tech industry, especially when it comes to cloud services and AI systems. Sales went up just 1.47% in Q1 2024, less than the average 10% growth managed by competitors.
Even though the company is trying to change its business plan, its legacy IT services segment is still hurting its overall performance, leading to sluggish capital appreciation of around 30%. For context, Nvidia (NASDAQ:NVDA) stock closed Friday at around $898, a 210% one-year gain.
To streamline its business operations, IBM laid off many people in its marketing and communications departments earlier this year, saving the company $3 billion a year by the end of 2024.
Arvind Krishna, CEO of IBM, is now focusing on upskilling workers with the latest AI-focused skills. IBM will replace over 8,000 roles as it starts to scale operations through automation and digital intelligence.
Krishna is notable for acknowledging the fact that IBM, though entering the AI race early lost its way a bit. In an interview with CNBC, he said, “I think that’s a fair criticism, that we were slow to monetize and slow to make really consumable the learnings from Watson winning Jeopardy.”
Exxon Mobil (XOM)
Exxon Mobil‘s (NYSE:XOM) earnings fell across all of its business groups in the first quarter of 2024 due to lower industry refining margins and unfavorable timing effects, especially from derivative mark-to-market impacts, which contributed to this decline.
Another recent issue is Exxon’s dropping its lawsuit against Santa Barbara County for not obtaining permission to carry oil from offshore installations. According to environmental groups, moving crude oil through sensitive areas could cause oil spills and traffic accidents. Apart from the ecological damage, substantial legal losses can also occur.
Another concern is that ExxonMobil intends to search for oil and gas in Guyana and Venezuela’s claimed South American shoreline. Because both countries claim the land, the proposal has raised geopolitical and natural concerns.
Finally, ExxonMobil and other oil firms are also criticized for global carbon emissions. Countries like Guyana, where ExxonMobil is active, use their forests to balance out their emissions while still making oil. As the younger generation becomes more ESG-conscious, such issues can lead to issues for XOM stock in the future.
Walgreens Boots Alliance (WBA)
Walgreens Boots Alliance (NASDAQ:WBA) is down over 35% this year, thanks to narrowing its fiscal year 2024 and slashing its dividend 48%, amid a tough retail environment.
WBA reported a net loss of $67 million in the first quarter, less than the $3.7 billion loss in the same quarter the previous year, but this gain was due to the fact that there wasn’t a big pre-tax charge for opioid-related lawsuits and claims that had changed the numbers from the previous year.
Boots’ retail sales in the UK did really well. Compared to the same quarter last year, pharmacy sales went up 0.8% and retail sales went up 9.8%. Boots.com’s sales went up by 17.5%, which made it stand out. These sales now make up more than 19% of all sales at Boots.
But in the U.S., the healthcare segment made $1.9 billion in sales, with the VillageMD purchase of Summit Health being the driving factor. In the end, the segment reported an operating loss, which is bad news for Walgreens in a key segment.
The results come shortly after S&P Global Ratings downgraded Walgreens, saying that recent changes in management, such as the CEO and CFO, put the company’s healthcare business at risk.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.