5 Big Winners as Wall Street Wraps Up Strong January Gains
After a dismal 2022, Wall Street concluded the first month of 2023 with healthy gains. The Dow Jones Market Data added that the S&P 500 has soared 6.2% so far this year, notching its best January gains since 2019. Lest we forget, the broader index, particularly, had a painful 2022, with the index tanking nearly 20% and registering its worst annual performance since the financial crisis way back in 2008.
The Dow, meanwhile, gained 2.8% for the month of January, and the tech-laden Nasdaq surged 10.7%, marking its best January performance since 2001, added the Dow Jones Market Data. Interestingly, the rally in tech comes despite bigwigs executing layoffs and other cost-cutting measures.
A slowdown in U.S. pay growth gave upside support for stocks. Per the U.S. Bureau of Labor Statistics, wages and benefits increased by 1% in the final three months of 2022, but that’s less than the 1.2% increase during the July-September quarter.
Thus, a slowdown in wage growth is expected not to fuel inflation higher and has given assurance that the Federal Reserve won’t be accelerating its interest rate hikes this year. Needless to say, the rate hikes last year to tame sky-high inflation had increased the cost of borrowing, curtailed consumer spending, and derailed economic growth.
Last year, in December, interest rates were hiked by 50- basis- points, which followed a 75-basis-point increase four times consecutively. But now market pundits are expecting a rate increase by only 25 basis points this month. This is primarily because inflation has started to show signs of cooling off, with the consumer price index advancing by 6.5% year-over-year in December, down from a 40-year high of 9.1% in June.
The International Monetary Fund (IMF), by the way, now expects global economic growth to increase by 2.9% this year, more than its October estimate of a 2.7% rise. The IMF believes that an upbeat labor market, improvement in consumption patterns, and the reopening of the Chinese economy following the coronavirus pandemic would surely boost economic growth and crush recessionary concerns. IMF’s upbeat outlook on global economic growth too drove stocks higher and gave enough hope that the rally will last for the rest of 2023.
Given such bullishness, we have highlighted five stocks that have not only made the most of the January rally but also are poised to gain further this year, banking on a less aggressive Fed and better global economic growth prospects. These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AppHarvest APPH is an applied technology company building indoor farms principally in Appalachia. Presently, Axcelis Technologies has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 0.9% over the past 60 days. APPH’s expected earnings growth rate for the current year is 14.6%. APPH’s shares have gained 293% so far this year.
Lucira Health LHDX is a medical technology company. Currently, Lucira Health has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 5.8% over the past 60 days. LHDX’s expected earnings growth rate for the current year is 63.2%. LHDX’s shares have gained 234.3% year to date.
Lucid Group LCID is an automotive company that specializes in electric cars. Presently, Lucid Group has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 9.9% over the past 60 days. LCID’s expected earnings growth rate for the current year is 79.4%. LCID’s shares have gained 72% so far this year.
Life Time Group Holdings LTH reshaped how consumers approach their health through an omnichannel, healthy way of life community that addresses all aspects of healthy living, healthy aging, and healthy entertainment. Currently, Life Time Group has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 40% over the past 60 days. LTH’s expected earnings growth rate for the current year is 94.1%. LTH’s shares have gained 55.8% year to date.
Ameriprise Financial AMP provides various financial products and services to individual and institutional clients in the United States and internationally. Presently, Ameriprise Financial has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 5.1% over the past 60 days. AMP’s expected earnings growth rate for the current year is 21.6%. AMP’s shares have gained 10.3% so far this year.
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