All three major U.S. indexes — the Nasdaq Composite, the S&P 500 and the Dow Jones Industrial Average — have gained 1%, 0.86% and 0.91%, respectively, on positive economic data in the holiday-shortened trading week. All eyes are on the Federal Reserve’s first policy meeting of 2025 from January 28-29.
U.S. business activity in January hit the lowest level since April due to a rise in pricing pressure. The S&P Global’s flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, has declined to 52.4 this month from 55.4 in December. It is important to note that a reading above 50 indicates expansion.
The labor market remains healthy, and data shows no sign of deterioration. The number of Americans filing new applications for unemployment benefits swelled to more than a three-year high. Weekly jobless claims increased 6,000 to 223,000 and continuing claims rose 46,000 to 1.899 million. Despite the low rate of layoffs, employers remain cautious about adding headcount. Rising inflation, along with uncertainty over President Donald Trump’s plans of tax cuts and broad tariffs, could slow down the Fed’s rate cut plans.
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:
PSQ and KORE Following Zacks Rank Upgrade
Shares of PSQ Holdings, Inc. PSQH have gained 80.2% (versus the S&P 500’s 3.8% increase) since it was upgraded to a Zacks Rank #2 (Buy) on November 16.
Another stock, KORE Group Holdings, Inc. KORE, which was upgraded to a Zacks Rank #2 on November 22, has returned 20% (versus the S&P 500’s 2.4% increase) 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 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 year-end 2024, the Zacks # 1 Rank stocks generated an annualized average return of +24.3% since 1988 vs. +11.4% for the S&P 500 index).
You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check PSQ’ historical EPS and Sales here>>>
Check KORE’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Raymond James Financial and StoneX
Shares of Raymond James Financial, Inc. RJF and StoneX Group Inc. SNEX have advanced 7.5% (versus the S&P 500’s 1.8% increase) and 6.2% (versus the S&P 500’s 2.9% increase) since their Zacks Recommendation was upgraded to November 14 and November 21, 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, Axon Enterprise Shoot Up
Shares of Palantir Technologies Inc. PLTR, which belongs to the Zacks Focus List, have gained 76.1% over the past 12 weeks. The stock was added to the Focus List on March 26, 2024. Another Focus-List holding, Axon Enterprise, Inc. AXON, which was added to the portfolio on June 3, 2020, has returned 37.3% over the past 12 weeks. The S&P 500 has advanced 5% over this period.
The 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 50-stock Zacks Focus List model portfolio 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 produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.69% (through year-end 2024). This compares to a +10.38% annualized return for the S&P 500 index and +10.03% 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 & Tractor Supply Make Significant Gains
AutoZone, Inc. AZO, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 6.4% over the past 12 weeks. Tractor Supply Company TSCO has followed AutoZone with 6.2% returns.
The Zacks ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned +5.62% in November 2024 vs. the S&P 500 index’s +5.87% return (IVV 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 Paychex and Home Depot Outperform Peers
Paychex, Inc. PAYX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 4.1% over the past 12 weeks. Another ECDP stock, Home Depot, Inc. HD, has increased 3.9% 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 Paychex's dividend history here>>>
Check Home Depot’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) 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 the 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 Stocks Westinghouse Air Brake Technologies Delivers Solid Returns
Westinghouse Air Brake Technologies Corporation WAB, from the Zacks Top 10 Stocks for 2025, has jumped 10.2% year to date, compared with the S&P 500 index’s 3.8% increase.
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 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 +1,998% through year-end 2024, vs. +461.86% for the S&P 500 index. The portfolio has produced an average return of +25.9% in the period 2012 through year-end 2024, vs. +12.49% for the S&P 500 index and +10.16% for the equal-weight version of the index.
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