Wall Street wrapped up its best quarterly performance in decades buoyed by a combination of unprecedented levels of fiscal and monetary stimulus, a technology sector boom, hopes of a coronavirus vaccine and easing of lockdown measures.
Nasdaq outperformed, having climbed 30.6% — the best since fourth quarter 1999. The S&P 500 and Dow Jones gained 20% and 17.8%, respectively. The former had its biggest single-quarter surge since 1998 and the latter logged in the best quarter since 1987. This marks an impressive comeback for the stocks from the worst first quarter since the 2008 financial crisis due to the coronavirus pandemic, which had halted economic activities and resulted in millions of people losing their jobs.
In fact, the impressive gains came despite the resurgence in coronavirus infections in some parts of the United Sates after reopening. Per the latest report, the United States has recorded nearly 156,000 new coronavirus cases over the July Fourth Weekend. New cases are up 42% in Florida over the past week, 32% in Arizona, 40% in Montana, 37% in the Virgin Islands, 33% in Idaho, 30% in South Carolina, 29% in Texas, and up 21% in California over the same period, according to the Washington Post. The rolling seven-day average of new cases was 48,361 Saturday, up from 11,740 one week ago.
The surge in number of cases lately has sparked concerns about the world economy and its recovery from the pandemic. However, the worry has been offset by the latest bouts of data, which indicate that the U.S. economy has been recovering faster than expected from the COVID-19 pandemic. This is especially true as the it created 4.8 million jobs in June, the highest since the Labor Department began keeping records in 1939, as more restaurants and bars resumed operations. Manufacturing activity rebounded in June, hitting its highest level in more than a year while consumer confidence logged in the biggest gain since 2011.
While there are winners from various corners of the space, we have highlighted stocks that showed strong momentum last quarter and have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). Below we have presented a bunch of those large-cap stocks that more than doubled over the past three months along with double-digit estimated earnings growth for the fiscal year and will continue to outperform heading into the second half. You can see the complete list of today’s Zacks #1 Rank stocks here.
Wayfair Inc. W – Up 178.6%
With a market cap of $20.3 billion, Wayfair is one of the world's leading online sellers of home goods products, consisting of furniture and home decor. The stock saw solid earnings estimate revision of $5.33 for this year over the past three months with an expected earnings growth rate of 47.3%. It sports a Zacks Rank #1.
Datadog Inc. DDOG – Up 142.5%
This company provides monitoring services for cloud-scale applications which includes monitoring of servers, databases, tools and services, through a SaaS-based data analytics platform. The Zacks Consensus Estimate has moved upward from a loss of 7 cents to earnings of 3 cents for this year over the past 90 days and reflects year-over-year growth of 400%. Datadog has a market cap of $26.8 billion and carries a Zacks Rank #2.
Tesla Inc. TSLA – Up 110.9%
It designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, Netherlands, Norway and internationally. The stock saw positive earnings estimate revision of 10 cents for this year over the past three months with an expected earnings growth rate of 3261.5%. Tesla has a market cap of $224 billion and carries a Zacks Rank #2.
DocuSign Inc. DOCU – Up 110.7%
This company provides e-signature solutions that offer services to mortgage, non-profit, government, real estate, insurance, technology and healthcare industries. The stock has an expected growth rate of 48.4% for the fiscal year (ending January 2021). It has a Zacks Rank #2 and has a market cap of $35.1 billion.
Zoom Video Communications Inc. ZM – Up 110.2%
It provides a video-first communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. With a market cap of $73.8 billion, the stock witnessed solid earnings estimate revision of 75 cents for the fiscal year (ending January 2021) in the past three months. It has an estimated earnings decline of 237.1% and has a Zacks Rank #1.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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