For Immediate Release
Chicago, IL – December 16, 2013 – 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 the Automatic Data Processing ( ADP- Free Report), Macy’s, Inc. ( M- Free Report), L Brands, Inc. ( LB- Free Report), The Gap, Inc. ( GPS- Free Report), Wal-Mart Stores Inc. ( WMT- Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Friday’s Analyst Blog:
Retail Sales Up – Should the Fed Taper?
Is the economy settled on its growth trajectory? Well, for now it seems so as the latest retail sales data released by the U.S. Department of Commerce validates this. Renewed consumer confidence and the festive mood were well reflected in the November retail sales number that rose 0.7%, led by a surge in auto sales. The gain, which is the most since June 2013, followed a 0.6% rise witnessed in October; thus removing the cloud of obscurity about economic growth.
However, excluding auto sales, retail sales climbed 0.4%. Auto sales increased 1.8% in November, the highest in six months. A recovery in the housing market, surging stock portfolios, strengthening manufacturing sector and improving labor market condition are playing vital roles to help the consumer confidence move north and propelling economic recovery.
Consumer confidence is a key determinant for the economy’s health with consumer spending accounting for over two-third of the U.S. economic activity. The preliminary data for December released by the University of Michigan and Thomson Reuters showed that consumer-sentiment index jumped to 82.5 from November’s reading of 75.1 buoyed by improving fundamentals.
What is inspiring consumer spending is the improving job prospects, with unemployment rate declining to a five-year low of 7% in November. Further boosting sentiment was the total non-farm payroll data that said employment grew 203,000 in November, higher than the consensus estimate of 182,000.
National Employment Report released by Automatic Data Processing ( ADP- Free Report) stated that the U.S. nonfarm private sector employment added 215,000 jobs, higher than the expected increase of 173,000 jobs, and crossed 200K for the first time in 12 months.
However, the latest report from Labor Department may be troublesome for investors that indicated initial claims for jobless aid has risen 68,000 to 368,000. But there are more positives prevailing in the economy to offset this. The strong November retail sales data hints of a healthy holiday season ahead and talks about regained consumer confidence that was battered by higher payroll taxes, recent political tussle and the 16-day partial U.S. government shutdown.
So far this year, the broader markets have showcased signs of a better pace of recovery and have thus infused hopes of a better economic scenario going forward. Though this statement is debatable, the significant recovery in the stock market is reflected through strong gains for the broader market indices. S&P 500 has clocked gains of roughly 21.4%, while Dow Jones Industrial Average has advanced approximately 17.3% so far this year. The Nasdaq Composite Index has increased 28.5% year-to-date.
Now with improving economic prospects, the question arises, “Should Federal Reserve start tapering its $85 billion monthly stimulus program that was initiated to keep interest rates low and boost economic growth?” Fed Officials in the past have been hinting of gradual roll back of the stimulus package in case the economy shows signs of recovery. With encouraging economic numbers coming out of late, chances of tapering look a near possibility.
Market watchers had previously anticipated that the Federal Reserve would begin tapering its stimulus program early next year. Such expectations were strengthened following earlier announcements that it would reduce its bond purchases only when certain economic indicators reached desired levels. This included a significant decline in the unemployment rate. The nonfarm payrolls report supports expectations that the economy has recovered to the point where it can withstand reductions in Fed bond purchases.
After going through the above facts, a sense of optimism comes in our mind. It looks like the economy is now steadily making its way out of the woods, and we hope the arrival of Christmas will shed consumers’ apprehension and drive demand.
If everything goes well and consumer confidence further rises with improving economy, then we could see a spur in demand with willingness to shell out more this holiday season - bringing cheers to retailers such as Macy’s, Inc. ( M- Free Report), L Brands, Inc. ( LB- Free Report), The Gap, Inc. ( GPS- Free Report), Wal-Mart Stores Inc. ( WMT- Free Report), and others.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on ADP - FREE
Get the full Report on M - FREE
Get the full Report on LB - FREE
Get the full Report on GPS - FREE
Get the full Report on WMT - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
For Immediate Release