For Immediate Release
Chicago, IL – May 4, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Tesla Inc. TSLA, Cisco Systems Inc. CSCO, Comcast Cor. CMCSA, Qualcomm Inc. QCOM and Micron Technology Inc. MU.
Here are highlights from Friday’s Analyst Blog:
Best April in 82 Years: 4 Reasons the Rally Will Continue
Situations change faster than the weather on Wall Street. The stock market commenced 2020 from where it left off last year and continued the bull run till mid-February. Suddenly, in March, Wall Street entered into bear market, ending the historically longest 11-year bull run, as coronavirus began to spread rapidly across the world. All three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — plunged 12.1%, 11.1% and 10.1%, respectively, in March.
However, the stock market rally begun from Mar 24 and maintained its momentum throughout April. Consequently, the Dow, the S&P 500 and the Nasdaq Composite rallied 11.1%, 12.7% and 15.5%, respectively, in April. For both the Dow and the S&P 500, it was the best April since 1938 while the Nasdaq Composite witnessed best April in its history.
April's Rally Broad-Based
The above-mentioned three major indexes primarily consist of large-cap stocks. Apart from these large-cap peers the small-cap-centric Russell 2000 index jumped 14% in April, marking its best month since 2011 and its best April since 2009. Moreover, the mid-cap specific S&P 400 index climbed 14.1% last month.
While it is certain that volatility will remain part of regular trading at least for the next few months, it seems to be receding. This is evident from the movement of the COBE VIX, which indicates market's expectation of a 30-day forward-looking volatility based on the near-term S&P 500 index options (both puts and calls). Wall Street's best fear gauge plunged 60% on Apr 30 from its all-time high of 85.47 recorded on Mar 18. The VIX is gradually approaching its historical average of 20.
Negative Estimates Already Factored in Market Valuation
Economic data are historical facts while market's movement depends to a large extent on market participants' expectations going forward. The first and foremost point that should be taken into consideration is the fact that the present downturn is not the result of any economic, financial or geopolitical factors but due to a biological hazard in the form of coronavirus.
In a post-World War II world, this is the first time that a health hazard has brought the global economy to a standstill. Consequently, any recently released or to be released economic and other data over the coming months should not be taken at as the be-all and end-all by investors.
Possibility of Economy Reopening
Several states in the country are considering plans to reopen the economy systematically. States like Alaska, Georgia, South Carolina, Tennessee and Texas have already started allowing restaurants, salons, spas and barbershops to serve customers. Mike DeWine, governor of Ohio, has set May 12 as the date for retail stores and other service industries to reopen. Andrew Cuomo, governor of coronavirus hotspot New York, said that the economy will be opened in phases.
In Europe, Spain has allowed citizens to leave their homes for short walks and exercise from May 2. Belgium and Italy will ease restrictions from May 4. In France, the government is preparing to ease economic shutdown from May 11. In Asia, India permitted manufacturing and farming to resume in rural areas last week.
Strong Pent-Up Demand Likely to Fuel Recovery
The U.S. economy was performing well buoyed by strong consumer spending before the advent of the coronavirus. However, the lockdowns imposed by the United Sates and across the world along with the breakdown of global supply chain system, significantly dented both consumer and business confidence.
Skyrocketing unemployment and a sharp fall in personal spending are results of the lockdowns. The situation will improve once the economy starts opening gradually. An unprecedented $8 trillion fiscal and monetary stimulus injected by the U.S. government and the Fed has instilled investor confidence. Several Eurozone countries, Japan and the leading emerging market economies also provided $7-8 trillion of stimulus packages.
The Trump administration's decision to spend money in the form of unemployment insurance and giving stimulus checks to retirees, massive restructuring package to small businesses and the Fed's decision to inject money into the economy by means of purchasing even the high-yielding junk bonds will create significant pent-up demand. Moreover, the central bank's decision to keep the benchmark interest rate at 0% will also make funds available to both businesses and individuals.
Several Good Stocks Available at Attractive Prices
The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — plummeted 38.4%, 35.4% and 32.6%, respectively from their all-time highs recorded in mid-February to the lowest level on Mar 23. With this turmoil, valuation of several good stocks - popularly considered as the jewels of Wall Street, also plunged. These stocks are available at lucrative prices now.
Stocks of several corporate behemoths such as Tesla Inc., Cisco Systems Inc., Comcast Cor., Qualcomm Inc. and Micron Technology Inc. are still between 20% and 40% below their 52-week highs. All these stocks, each with a Zacks Rank #3 (Hold), have strong growth potential and are prudent for long-term investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Comcast Corporation (CMCSA) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
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