Trade: Citigroup (C), Pepsico (PEP)

Notes:
Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

Today I purchased small positions in both Pepsico and Citigroup.  Shares of Citigroup were purchased at a price of $51.55 while Pepsico shares were purchased at $94.89.  Clearly both stocks ended the day lower on those prices as the market fell pretty hard on interest rate hike and strong US dollar fears.  

Pepsi's stock price has fallen hard after being over $100 earlier this year.  A large part of this is certainly due to the strength of the dollar and impacts I called out that could still impact earnings in regards to the exchange rate of both Russia and Venezuela.  I knew I might be a little early on the move, which is why I went and bought an even smaller position (half the size) I was originally looking to purchase, however at the same time the stock's price was lower than we've seen it in some time while providing some of the strongest performance we've seen from the company.  I have long term faith and interest in this stock and felt this was an opportunity to use some of my excess cash before things suddenly turn on me and go higher.

Citigroup's price decline surprised me somewhat after being so strong for so long.  I felt I needed to pick up at least a little bit of a position to, again, put some excess cash to work as well as take advantage of what I am thinking will turn out to be a positive capital allocation plan as a result of the CCAR on Friday.  I cannot exactly say what is driving financials down if an increase in interest rates is the worry - they become the beneficiary of such an event.  The strong US dollar would have an impact to earnings of an international bank like Citigroup, but I don't believe it's as strong as the earnings growth could be from rate hikes.

This puts my cash position at just over 21% after the decline the portfolio has taken this week and making these purchases.  This also doesn't include the ever looming infusion I occasionally refer to.  Since these are longer term investments, I'm comfortable with my moves and if I get stronger pullbacks, I may take additional positions.