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In my post of June 28 “My baseline stock market scenario for the next 30 days” I pointed to an earnings/post earnings report pattern that I thought posed significant danger to stocks. Analysts, I noted, were projecting knock out earnings growth for the second quarter of better than 20%. But, I wrote, while expectations for the third quarter were almost equally strong, those projections and that quarter would see the first real effects of any slowdown in the global economy as a result of the tariff war kicked off by the Trump administration’s trade policies. That meant, I worried, that reports of blockbuster second quarter earnings would be followed by companies announcing lower guidance for the third quarter. That wouldn’t go over well in this nervous market and stocks that showed that reporting pattern would move lower (strongly lower), I concluded. I was especially concerned about the shares of companies that were counting on big revenue growth from China in light of trade tensions between the United States and China and evidence of a slowing of the Chinese economy’s rate of growth.

All this applies to McDonald’s (MCD) and I’m therefore selling it out of my Dividend Portfolio as of tomorrow, July 3. The shares pay a dividend of 2.46% currently, which isn’t juicy enough to make up for the risk over the next few weeks. In your own account you may want to try to shave this sell closer to the company’s July 26 earnings report since there is a decent possibility that the stock might move up as traders buy in anticipation of a strong earnings report. (The consensus forecast is looking for earnings of $1.93 a share, up from $1.79 a share. With its April report the company surprised by 12 cents a share to the upside.)

The stock is down 11.33% since I added it to the Dividend Portfolio on January 23, 2018.