Wall Street to Turn Around in Final Months of 2023: 5 Winners
Major indexes in the United States registered their worst performance in five years last month and posted the third successive monthly loss, marking the longest losing streak since March 2020. Tension in the Middle East and high Treasury yields damaged the appeal of riskier assets like stocks.
However, amid the gloom, market pundits expect the stock market to bounce back in the final months of this year. This is because stocks, traditionally, have seen strong performance in the final three months of any year. Lest we forget, investors traditionally sell stocks in May only and return at the end of September or October to make most of the year-end upward wave.
Carson Group’s Ryan Detrick added that by analyzing FactSet data, he found out that the broader S&P 500 Index historically gained in November after falling in August, September and October.
Moreover, stocks have already indicated that they have reached the bottom and are now poised to scale northward. For instance, the S&P 500, after falling into the correction territory last week, has recovered some ground so far this week.
In reality, U.S. stocks finished higher during the first day of trading in November, thanks to the Federal Reserve keeping interest rates unchanged in its latest policy meeting. As widely anticipated, the central bank kept the interest rates in the range of 5.25% to 5.5%.
Fed Chairman Jerome Powell also reassured that there is a growing possibility that the rate-hiking cycle is over since the slew of interest rate hikes for quite some time now has put downward pressure on inflation. Needless to say, the Fed’s decision to hold rates steady boosted the stock market since rate hikes hamper economic growth, curtail consumer outlays, and increase the cost of borrowing.
Meanwhile, the U.S. economy remains in sound shape, and that may help stocks gain traction soon. The third-quarter GDP expanded at an annualized rate of 4.9%, the fastest growth in nearly two years, per the U.S. Bureau of Economic Analysis. An uptick in consumer spending helped the economy to accelerate.
Thus, with things looking up for the economy vis-a-vis the stock market, it’s prudent for investors to place bets on stocks that are positioned to scale upward. These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and have a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
American Woodmark AMWD is the third-largest manufacturer of kitchen and bath cabinets. American Woodmark, currently, has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 18.3% over the past 60 days. AMWD’s expected earnings growth rate for the current year is 4.9%.
Amazon.com AMZN is one of the largest e-commerce providers. Amazon, currently, has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 18.4% over the past 60 days. AMZN’s expected earnings growth rate for the current year is 271.8%.
BuildABear Workshop BBW is the leading and only national company providing a make-your-own stuffed animal interactive retail entertainment experience. BuildABear Workshop, currently, has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.3% over the past 60 days. BBW’s expected earnings growth rate for the current year is 16.9%.
Caterpillar CAT is the largest global construction and mining equipment manufacturer. Caterpillar, currently, has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.5% over the past 60 days. CAT’s expected earnings growth rate for the current year is 45.3%.
Deckers Outdoor DECK is a leading designer, producer and brand manager of innovative, niche footwear and accessories. Deckers Outdoor, currently, has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 4% over the past 60 days. DECK’s expected earnings growth rate for the current year is 20.2%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
American Woodmark Corporation (AMWD) : Free Stock Analysis Report
Build-A-Bear Workshop, Inc. (BBW) : Free Stock Analysis Report
