The three most widely followed U.S. indexes lost their ground during the holiday-shortened trading week. The Nasdaq Composite, the Dow Jones Industrial Average and the S&P 500 decreased by 2.6%, 2.5% and 1.9% last week. The Federal Reserve’s concern over stubbornly high inflation, poor economic reports, and new tariff threats by President Donald Trump made investors jittery.
The Fed, in its January policy meeting, kept key interest rates unchanged. The central bank expressed concerns over the increase in inflation and the potential impact of Trump's fiscal, trade and immigration policies. The U.S. Consumer Sentiment Index fell to a 15-month low of 64.7 in February compared to a revised final reading of 71.7 in January. The S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a 17-month low of 50.4 in the same period compared to 52.7 in January. In addition to the previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals, Trump will soon add tariffs on lumber and forest products. Analysts are concerned that Trump’s reciprocal tariff policies will soften consumer demand and can potentially start a global trade war.
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:
Nomura and Corning Following Zacks Rank Upgrade
Shares of Nomura Holdings, Inc. NMR have gained 12.3% (versus the S&P 500’s 0.9% increase) since it was upgraded to a Zacks Rank #2 (Buy) on December 24.
Another stock, Corning Incorporated GLW, which was upgraded to a Zacks Rank #2 on December 31, has returned 8.8% (versus the S&P 500’s 2% increase) since then.
A hypothetical portfolio of Zacks Rank # 1 (Strong Buy) stocks returned -3.48% in January 2025 (through February 3rd) vs. -0.60% for the S&P 500 index and -2.75% for the equal-weight version of the index
This portfolio returned +22.3% in 2024, vs. +28% for the S&P 500 index and +19.9% 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 late 2022.
The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by almost 13 percentage points since 1988 (through the end of January 2025, the Zacks # 1 Rank stocks generated an annualized average return of +23.9% since 1988 vs. +11.3% for the S&P 500 index).
You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Nomura’s historical EPS and Sales here>>>
Check Corning’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Priority Technology and Wells Fargo
Shares of Priority Technology Holdings, Inc. PRTH and Wells Fargo & Company WFC have advanced 13.23% (versus the S&P 500’s 0.9% increase) and 8.3% (versus the S&P 500’s 0.3% fall) since their Zacks Recommendation was upgraded to December 24 and December 25, respectively.
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 Palantir Technologies, Lam Research Shoot Up
Shares of Palantir Technologies Inc. PLTR, which belongs to the Zacks Focus List, have gained 57.5% over the past 12 weeks. The stock was added to the Focus List on March 26, 2024. Another Focus-List holding, Lam Research Corporation LRCX, which was added to the portfolio on December 5, 2016, has returned 18.4% over the past 12 weeks. The S&P 500 has advanced 0.7% over this period.
The Focus List portfolio returned +3.13% in January 2025 vs. +2.79% for the S&P 500 index and +3.50% for the equal-weight version of the index.
The 50-stock Zacks Focus List portfolio returned +18.41% in 2024 vs. +25.04% for the S&P 500 index and +13% for the equal-weight S&P 500 index. The portfolio had returned +29.54% 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 returned -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.81% (through the end of January 2025). This compares to a +10.48% annualized return for the S&P 500 index and +10.17% for the equal-weight version of the 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 AutoZone & Costco Wholesale Make Significant Gains
AutoZone, Inc. AZO, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 8.7% over the past 12 weeks. Costco Wholesale Corporation COST has followed AutoZone with 7.4% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned -6.29% in December 2024 vs. the S&P 500 index’s -2.41% return (SPY ETF).
For the year 2024, the portfolio returned +16.26% vs. +24.89% for the S&P 500 index (SPY ETF).
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, 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 Coca-Cola and Quest Diagnostics Outperform Peers
The Coca-Cola Company KO, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 11.6% over the past 12 weeks. Another ECDP stock, Quest Diagnostics Incorporated DGX, has increased 5.3% 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 Coca-Cola's dividend history here>>>
Check Quest Diagnostics’ 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 to significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -7.44% in December 2024 vs. the S&P 500 index’s -2.41% pullback and the Dividend Aristocrats ETF’s (NOBL) -6.72% decline.
For full-year 2024, the portfolio returned +6.95% vs. +24.89% for the S&P 500 index and +6.72% for 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 Stock Primo Brands Delivers Solid Returns
Primo Brands Corporation PRMB, from the Zacks Top 10 Stocks for 2025, has jumped 10.7% year to date, compared with the S&P 500 index’s 2.4% increase.
The Top 10 portfolio returned +4.56% in January 2025 vs. +2.79% for the S&P 500 index and +3.50% for the equal-weight version of the index.
The Top 10 portfolio returned +62.98% in 2024, vs. +25.04% for the S&P 500 index and +13% for the equal-weight version of the index. The portfolio had 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 +2,093.76% through the end of January 2025 vs. +477.51% for the S&P 500 index and +367.46% for the equal-weight version of the index. The portfolio has produced an average return of +26.18% in the period 2012 through the end of January 2025, vs. +12.70% for the S&P 500 index and +10.46% for the equal-weight version of the index.
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