Last week, the Dow Jones Industrial Average gained 0.2%, whereas the tech-heavy Nasdaq Composite declined 0.22%. The S&P 500 remained unchanged. Broader market uncertainties during the holiday-shortened trading week weighed on investors’ confidence.
The consumer confidence for December came in at 104.7, significantly lower than the market consensus of 113, per a report by the Conference Board. On December 27, the 10-year U.S. Treasury yield surged to 4.626%, hovering near a seven-month high as market participants are expecting a more hawkish Federal Reserve in 2025.
The U.S. labor market is still healthy, and cooling consistently as per Fed’s expectations. The number of Americans filing new applications for jobless benefits dipped to the lowest in a month last week. The jobless claims data for the week ending December 21 fell by 1,000 to 219,000, below the 225,000 consensus forecast from Dow Jones. However, continuing claims rose by 46,000 for the week ending December 14 to the highest level in three years.
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:
Talkspace and Royal Caribbean Cruises Following Zacks Rank Upgrade
Shares of Talkspace, Inc. TALK have gained 17.1% (versus the S&P 500’s 2.43% increase) since it was upgraded to a Zacks Rank #1 (Strong Buy) on October 29.
Another stock, Royal Caribbean Cruises Ltd. RCL, which was upgraded to a Zacks Rank #2 (Buy) on October 28, has returned 15.8% (versus the S&P 500’s 2.7% 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 stocks returned +21.6% in the year-to-date period through November 4th, 2024, vs. +28.3% for the S&P 500 index and +18.6% 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 November 4, 2024, the Zacks # 1 Rank stocks generated an annualized average return of +24.1% since 1988 vs. +11.2% for the S&P 500 index).
You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Talkspace’ historical EPS and Sales here>>>
Check Royal Caribbean Cruises’ historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Agilysys and The Marcus
Shares of Agilysys, Inc. AGYS and The Marcus Corporation MCS have advanced 37.8% and 24.8% (versus the S&P 500’s 2.6% increase), respectively, since their Zacks Recommendation was upgraded to Outperform on October 31.
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, Shopify Shoot Up
Shares of Axon Enterprise, Inc. AXON, which belongs to the Zacks Focus List, have gained 54.6% over the past 12 weeks. The stock was added to the Focus List on June 3, 2020. Another Focus-List holding, Shopify Inc. SHOP, which was added to the portfolio on September 6, 2022, has returned 36.8% over the past 12 weeks. The S&P 500 has advanced 4.1% over this period.
The Focus List portfolio returned +26.86% in 2024 (through November 30) vs. +28.09% for the S&P 500 index and +20.56% 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 +12.11% (through November 30, 2024). This compares to a +10.55% annualized return for the S&P 500 index and +10.41% 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 Walmart & FactSet Research Systems Make Significant Gains
Walmart Inc. WMT, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 14.9% over the past 12 weeks. FactSet Research Systems Inc. FDS has followed Walmart with 6.1% returns.
The Zacks Earnings Certain Admiral Portfolio (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-to-date period (through the end of November 2024), the portfolio returned +24.07% vs. +28.1% for the S&P 500 index.
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 Hormel Foods and Clorox Outperform Peers
Hormel Foods Corporation HRL, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 0.4% over the past 12 weeks. Another ECDP stock, The Clorox Company CLX, has also climbed 0.3% 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 Hormel Foods' dividend history here>>>
Check Clorox’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 +3.06% in November 2024 vs. the S&P 500 index’s +5.87% gain and the Dividend Aristocrats ETF’s (NOBL) +4.85%.
For the year-to-date period (through November 30), the portfolio returned +15.55% vs. +28.1% for the S&P 500 index and +15.61% 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 Ollie's Bargain Outlet Delivers Solid Returns
Ollie's Bargain Outlet Holdings, Inc. OLLI, from the Zacks Top 10 Stocks for 2024, has jumped 55% year to date, compared with the S&P 500 index’s +25.1% increase.
The Top 10 portfolio returned +71.88% this year through November 30th, vs. +28.09% for the S&P 500 index and +20.56% 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 +2,112.57% through November 30, 2024, vs. +475.56% for the S&P 500 index. The portfolio has produced an average return of +26.6% in the period from 2012 through November 30, 2024, vs. +12.83% for the S&P 500 index and +10.93% for the equal-weight version of the index.
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