The market hit turbulence over the first three days of the week due to fears of inflation. As many investors prefer to stay invested during times like these, they still need to hold solid stocks. That's why David Cohne suggests Gaming (BYD), Owens Corning (NYSE:OC), and O'Reilly Automotive (NASDAQ:ORLY), three stocks exhibiting both fundamental and technical strength.Fears of inflation have rocked the market over the past three days, with the S&P 500 dropping 4% and the Nasdaq Composite losing 5.2%. Today the market was reacting to news that the Consumer Price Index posted its largest month over month increase since 2009 and its largest year over year rise since 2008. I've got three stocks I like right now even amidst the market turmoil, but first I'll explain why stocks are down.
Core inflation, which excludes food and energy prices, rose 0.9% last month, which was the most since 1982. A rise in inflation has both growth and value investors concerned, as higher inflation discounts a growth stock's present value and raises the likelihood that the Fed will raise rates, harming cyclical stocks. These factors have raised market volatility and drove stocks down. Whether the current market environment is temporary or could go on for a while, it's best to be more selective when picking stocks.
One strategy I like to focus on is picking stocks that have both fundamental and technical strength. So, I ran a screen for stocks rated a Buy in our POWR Ratings system that exhibits strong fundamental and technical indicators. Three top stocks that made the list were Boyd Gaming Corporation (NYSE:BYD), Owens Corning (NYSE:GLW) Inc (OC), and O'Reilly Automotive, Inc. (ORLY), which I'm highlighting below.