Last week, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite have gained 2%, 3% and 3.3%, respectively.
The Labor Department reported that initial jobless claims fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug 3, 2024. The number of Americans filing new applications for unemployment benefits saw the largest drop in about 11 months. The data suggests that fears in the labor market due to temporary motor vehicle plant shutdowns and disruptions caused by Hurricane Beryl in Texas are exaggerated, and the gradual softening in the labor market remains intact. The slowdown in the labor market is mainly due to the Federal Reserve's interest rate hikes in 2022 and 2023, which dampened demand and affected the hiring process.
The Institute for Supply Management reported that economic activity in the services sector expanded in July. The Services PMI for the month of July is registered at 51.4 against 48.8 in June. A reading above 50 indicates the services sector economy is generally expanding. It is important to note that the economic activity in the services sector expanded for the 47th time in 50 months.
On the international front, mounting tension in the Middle East, with Iran possibly entering the conflict with Israel, could impact oil prices in the near term.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements:
Elme Communities and New Jersey Resources Following Zacks Rank Upgrade
Shares of Elme Communities ELME have gained 10.4% (versus the S&P 500’s 0.3% decrease) since it was upgraded to a Zacks Rank #2 (Buy) on June 7.
Another stock, New Jersey Resources Corporation NJR, which was upgraded to a Zacks Rank #2 on June 14, has returned 5.5% (versus the S&P 500’s 1.4% decrease) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
A hypothetical portfolio of Zacks Rank #1 (Strong Buy) stocks has returned +6.1% in the year-to-date period through April 1, 2024, vs. +11.3% for the S&P 500 index and +7.7% for the equal-weight version of the S&P 500 index.
This hypothetical portfolio returned +20.63% in 2023 vs. +24.83% for the S&P 500 index and +15% for the equal-weight S&P 500 index.
The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks since October 2022.
The Zacks Model Portfolio — consisting of Zacks Rank #1 stocks — has outperformed the S&P index by more than 16 percentage points since 1988 (through April 1, 2024, the Zacks # 1 Rank stocks generated an annualized return of +27.6% since 1988 vs. +11.1% for the S&P 500 index).You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Elme Communities’ historical EPS and Sales here>>>
Check New Jersey Resources Corporation’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades La-Z-Boy and GEA Group
Shares of La-Z-Boy Incorporated LZB and GEA Group Aktiengesellschaft GEAGF have advanced 7.8% and 11.7%, respectively (versus the S&P 500’s 2.21% decline), since their Zacks Recommendation was upgraded to Outperform on June 21.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>
Zacks Focus List Stocks Axon, CBRE Shoot Up
Shares of Axon Enterprise, Inc. AXON, which belongs to the Zacks Focus List, have gained 26.4% over the past 12 weeks. The stock was added to the Focus List on June 3, 2020. Another Focus-List holding, CBRE Group, Inc. (CBRE), which was added to the portfolio on March 13, 2017, has returned 19.6% over the past 12 weeks. The S&P 500 has advanced 2.4% over this period.
The Focus List portfolio returned +10.23% in 2024 Q1 vs. +10.56% for the S&P 500 index and +7.9% for the equal-weight S&P 500 index.
The 50-stock Zacks Focus List model portfolio returned +31.44% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.91% (through March 31, 2024). This compares to a +10.25% annualized return for the S&P 500 index in the same time period.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks Check Point Software & Intercontinental Exchange Make Significant Gains
Check Point Software Technologies Ltd. CHKP, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 22% over the past 12 weeks. Intercontinental Exchange, Inc. ICE has followed Check Point Software Technologies with 11.3% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, has returned +9.08% in the year-to-date period (through March 31, 2024) vs. +10.42%.
In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.
With little to no turnover and annual rebalance periodicity, the ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stocks American Tower and Coca-Cola Outperform Peers
American Tower Corporation AMT, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 14.4% over the past 12 weeks. Another ECDP stock, The Coca-Cola Company KO, has also climbed 9% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
Check American Tower’s dividend history here>>>
Check Coca-Cola’s dividend history here>>>
With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) has returned +4.47% in the year-to-date period (through March 31, 2024) vs. +10.42% for the S&P 500 index (IVV) and +6.9% for the Dividend Aristocrats ETF (NOBL).
The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stocks CyberArk Software Delivers Solid Returns
CyberArk Software Ltd. CYBR, from the Zacks Top 10 Stocks for 2024, has jumped 25% year to date, which compares to the S&P 500 index’s +12.2% increase.
The Top 10 portfolio returned +19.56% in 2024 Q1 vs. +10.56% for the S&P 500 index and +7.9% for the equal-weight version of the index.
The Top 10 portfolio returned +25.15% in 2023 vs. +26.28% for the S&P 500 index. Since 2012, the Top 10 portfolio has produced a cumulative return of +1,060.9% through the end of 2023 vs. +360.1% for the S&P 500 index.
Since 2012, the Zacks Top 10 portfolio has produced an annualized return of +25.02% through the end of 2024 Q1 vs. +14.1% for the S&P 500 index and +12.7% for the equal-weight version of the index. The portfolio has produced a cumulative return of +1,442.3% vs. +403.03% for the S&P 500 index and +331.29% for the equal-weight index.
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