We're Making 2 Prudent Sales Ahead of the Fed

Symbol	Transaction Type	# Shares Traded	Recent Price $	Shares Owned After Trade	% Portfolio
GOOGL	Sell	44	252.75	867	4.0
MS	Sell	62	156.50	1,400	4.0

After you receive this Alert, we will make the following trades:

-- Sell 44 shares of Alphabet GOOGL at or near $252.75. Following the trade, GOOGL shares will account for roughly 4.0% of the Pro Portfolio.

-- Sell 62 shares of Morgan Stanley MS at or near $156.50. Following the trade, MS shares will account for roughly 4.0% of the Pro Portfolio.

On Monday, we shared that if shares of Alphabet and Morgan Stanley, which were already overbought, continued to move higher ahead of the Fed’s policy announcement, we may opt to do some prudent register ringing.

We are doing that this morning, reducing the Pro Portfolio’s exposure modestly to both positions to 4% each. The rationale for the move is that both stocks are overextended at current levels and vulnerable to a pullback if the Fed delivers a “buy the rumor, sell the news” event tomorrow.

As far as why we continue to have relatively large holdings in both names, we continue to see Alphabet benefiting from AI adoption, the continued shift to digital advertising, and share gains at YouTube. With Morgan Stanley, the IPO market is expected to heat up further in the December quarter, with Barclays calling for 20 to low 20s tech-related IPOs by the end of the year, with more to come in 2026.

While Barclays has a bit of a muddled definition of “tech-related,” as it includes healthcare tech companies, payments, and fintech companies; in its view, there have been 12-15 pure tech IPOs this year. That, along with the prospects for M&A activity, keeps us bullish on MS shares.

We are seeing price targets move higher for MS shares, including Wells Fargo lifting its target to $165 from $145. Our plan remains to revisit our current price target with an upward bias once this week’s IPO offerings are priced.

As we lock in these big gains, we’ll see a modest boost to the Pro Portfolio’s cash position to just over 10.5% of its assets. This will give us slightly more room to maneuver should the Fed disappoint the market and allow us to take advantage of what ensues.

(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)

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At the time of publication, TheStreet Pro Portfolio was long GOOGL and MS.