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Biden's First 100 Days Prove Stellar for Stocks: What's Next?

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·5 min read
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President Biden’s 100th day in the office is on Apr 29 and the stock market has already witnessed fantabulous growth during the stretch. The broader S&P 500 is up almost 9% since the inauguration day, as cited in a Barron’s article. In comparison, since 1929, the index has increased an average of 3.8% in the first 100 days of the 24 presidential terms, per Dow Jones Market Data, added the Barron’s article. Actually, the S&P 500 has jumped a whopping 24.1% since the Election Day through the first 100-day of Biden’s presidency, as mentioned in a CNBC article.

So, what’s behind the stellar returns? Of course, an easy monetary policy and ramping up of the pace of vaccination helped the economy vis-à-vis the stock market to recoup from the coronavirus onslaught. Reopening of businesses and relaxation of various restrictions also buoyed investors’ sentiments. Needless to say, the government’s stimulus plans and Biden’s initiative to increase spending on infrastructure and families turbo-charged the economy vis-à-vis the stock market as well.

But what happens next for the stock market? Investors are already concerned about the Biden administration’s proposal to hike capital gains tax. However, historically, the stock market has actually performed well when capital gains tax gets hiked. Moreover, capital gains tax is expected to be much lower than expected as the process to get it passed through Congress seems cumbersome (read more: Capital Gains Tax May Not Derail Wall Street Rally: 5 Top Picks).

Additionally, the economy has been chugging along nicely, something that bodes well for the stock market. Manufacturing as well as the service sector has shown signs of strengthening in recent times. Manufacturing activity picked up on an uptick in demand for new orders in spite of supply chain issues. Similarly, relaxation of travel bans and reopening of businesses helped the U.S. service sector gain strength. Americans, in the meanwhile, increased their outlays with retail sales numbers increasing handsomely last month. Outlays are further likely to increase as consumers remain self-assured about their welfare. This is a tell-tale sign that economic activity will pick up in the near term. Lastly, the labor market is up and running, with jobs being added at a healthy clip.

To top it, the first-quarter earnings results have been impressive so far, which in due course turned out to be a fillip for the stock market. Of the 153 S&P 500 members that have stated first-quarter results up to now, earnings have increased 46% on 5.9% higher revenues, with 84.3% and 75.2% surpassing earnings and revenue estimates, respectively (read more: Earnings on Track to Reach a New Quarterly Record).

Thus, with the stock market expected to maintain its bullish trend beyond Biden’s first 100 days in office, it’s prudent to invest in growth stocks. We have selected five such stocks that currently possess a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B.

Apple Inc. AAPL designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has risen nearly 1% over the past 60 days. The company’s expected earnings growth rate for the current year is 37.2%.

American Eagle Outfitters, Inc. AEO is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15-25 years. The company currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 39.3% over the past 60 days. The company’s expected earnings growth rate for the current year is a staggering 875%.

Conns, Inc. CONN is a specialty retailer currently operating retail locations in Texas and Louisiana. The company currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has advanced 25.4% over the past 60 days. The company’s expected earnings growth rate for the current year is an astonishing 2,616.67%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Goldman Sachs Group, Inc. GS is a leading global financial holding company providing investment banking, securities and investment management services to a diversified client base. The company currently has a Zacks Rank #1 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has risen 51.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 81.5%.

Advanced Micro Devices, Inc. AMD has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focus company from a pure-bred consumer-PC chip provider. The company currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved 1% up over the past 60 days. The company’s expected earnings growth rate for the current year is 51.2%.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>


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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
 
Conns, Inc. (CONN) : Free Stock Analysis Report
 
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