We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Wall Street rally has resumed, with all three major indexes hitting fresh all-time closing highs last week. The Dow, the S&P 500 and the Nasdaq closed 0.7%, 2% and 3.5% higher, respectively, last week on renewed optimism surrounding the Federal Reserve’s planned rate cuts.
The optimism is being triggered by easing inflation and signs of a cooling labor market. The latest report from the Labor Department showed an uptick in unemployment and a slowdown in new job creation.
Nonfarm payrolls rose by 206,000 in June from a downwardly revised May figure of 218,000 from the earlier reported 272,000.
The unemployment rate rose to 4.1% in June after rising 4% in the prior month. Also, wages increased 3.9% year over year in June, the smallest gain since June 2021. Wage growth in a 3-3.5% range is considered consistent with the Federal Reserve’s inflation target of 2%.
A tight labor market has been the biggest threat to the Fed in its fight to bring down inflation. However, the labor market has finally started showing signs of cooling and the tepid wage growth has raised hopes that the Federal Reserve will likely be able to check inflation without pushing the economy into a recession.
Also, inflation eased in April and May, raised hopes that the Federal Reserve could soon cut interest rates.
Federal Reserve Chairman Jerome Powell in his June post-FOMC meeting statement said that the central bank sees only a single 25 basis point rate cut this year, sharply lower than the three projected in its March meeting.
Even a single 25 basis point rate cut is good news given that many market participants had started believing that there would be no rate cut this year.
Moreover, the most recent FOMC "dot plot" predicts a 1% overall reduction in interest rates by 2025. Going by the forecast, the Fed funds rate is expected to drop to 4.1% by the end of 2025, which bodes well for the broader economy.
Our Choices
Given this scenario, we have narrowed our search to five consumer discretionary stocks, such as PlayAGS, Inc. (AGS - Free Report) , Six Flags Entertainment Corporation (FUN - Free Report) , OneSpaWorld Holdings (OSW - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Skechers U.S.A., Inc. (SKX - Free Report) , which have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PlayAGS, Inc. is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. AGS’ product line-up includes Class III EGMs for commercial and Native American casinos, video bingo machines for select international markets, table game products and interactive social casino products.
PlayAGS, Inc.’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. AGS currently sports a Zacks Rank #1.
Six Flags Entertainment Corporation and its affiliated companies own and operate five amusement parks: Cedar Point, Knott's Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun/Oceans of Fun. FUN’s parks are family-oriented, with recreational facilities for people of all ages, and provide clean and attractive environments with exciting rides and entertainment.
Six Flags Entertainment’s expected earnings growth rate for the current year is 14%. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. FUN currently has a Zacks Rank #2.
OneSpaWorld Holdings is a provider and innovator in the fields of wellness, beauty, rejuvenation and transformation on cruise ships and land. OSW’s service includes traditional and alternative massage, body and skincare treatment options, ayurvedic treatments, comprehensive hair and nail services, fitness, acupuncture, herbal medicine, pain management, and medi-spa.
OneSpaWorld Holdings’ expected earnings growth rate for the current year is 28.6%. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past 60 days. OSW carries a Zacks Rank #2 at present.
Norwegian Cruise Line Holdings Ltd. is a leading cruise line operator. NCLH owns and operates three brands — Oceania Cruises, Regent Seven Seas Cruises and Norwegian Cruise Line.
Norwegian Cruise Line Holdings’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 5.9% over the past 60 days. NCLH presently has a Zacks Rank #2.
Skechers U.S.A., Inc. designs, develops, markets and distributes footwear for men, women and children in the United States and overseas under the SKECHERS name, as well as under several uniquely branded names. SKX has distribution networks and joint venture partners in Asia and the Middle East, and wholly-owned subsidiaries in Canada, Japan, throughout Europe and Latin America.
Skechers U.S.A.’s expected earnings growth rate for the current year is 16.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. SKX presently carries a Zacks Rank #2.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cooling Labor Market Raises Rate Cut Hopes: 5 Stocks to Buy
The Wall Street rally has resumed, with all three major indexes hitting fresh all-time closing highs last week. The Dow, the S&P 500 and the Nasdaq closed 0.7%, 2% and 3.5% higher, respectively, last week on renewed optimism surrounding the Federal Reserve’s planned rate cuts.
The optimism is being triggered by easing inflation and signs of a cooling labor market. The latest report from the Labor Department showed an uptick in unemployment and a slowdown in new job creation.
Nonfarm payrolls rose by 206,000 in June from a downwardly revised May figure of 218,000 from the earlier reported 272,000.
The unemployment rate rose to 4.1% in June after rising 4% in the prior month. Also, wages increased 3.9% year over year in June, the smallest gain since June 2021. Wage growth in a 3-3.5% range is considered consistent with the Federal Reserve’s inflation target of 2%.
A tight labor market has been the biggest threat to the Fed in its fight to bring down inflation. However, the labor market has finally started showing signs of cooling and the tepid wage growth has raised hopes that the Federal Reserve will likely be able to check inflation without pushing the economy into a recession.
Also, inflation eased in April and May, raised hopes that the Federal Reserve could soon cut interest rates.
Federal Reserve Chairman Jerome Powell in his June post-FOMC meeting statement said that the central bank sees only a single 25 basis point rate cut this year, sharply lower than the three projected in its March meeting.
Even a single 25 basis point rate cut is good news given that many market participants had started believing that there would be no rate cut this year.
Moreover, the most recent FOMC "dot plot" predicts a 1% overall reduction in interest rates by 2025. Going by the forecast, the Fed funds rate is expected to drop to 4.1% by the end of 2025, which bodes well for the broader economy.
Our Choices
Given this scenario, we have narrowed our search to five consumer discretionary stocks, such as PlayAGS, Inc. (AGS - Free Report) , Six Flags Entertainment Corporation (FUN - Free Report) , OneSpaWorld Holdings (OSW - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Skechers U.S.A., Inc. (SKX - Free Report) , which have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PlayAGS, Inc. is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. AGS’ product line-up includes Class III EGMs for commercial and Native American casinos, video bingo machines for select international markets, table game products and interactive social casino products.
PlayAGS, Inc.’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. AGS currently sports a Zacks Rank #1.
Six Flags Entertainment Corporation and its affiliated companies own and operate five amusement parks: Cedar Point, Knott's Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun/Oceans of Fun. FUN’s parks are family-oriented, with recreational facilities for people of all ages, and provide clean and attractive environments with exciting rides and entertainment.
Six Flags Entertainment’s expected earnings growth rate for the current year is 14%. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. FUN currently has a Zacks Rank #2.
OneSpaWorld Holdings is a provider and innovator in the fields of wellness, beauty, rejuvenation and transformation on cruise ships and land. OSW’s service includes traditional and alternative massage, body and skincare treatment options, ayurvedic treatments, comprehensive hair and nail services, fitness, acupuncture, herbal medicine, pain management, and medi-spa.
OneSpaWorld Holdings’ expected earnings growth rate for the current year is 28.6%. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past 60 days. OSW carries a Zacks Rank #2 at present.
Norwegian Cruise Line Holdings Ltd. is a leading cruise line operator. NCLH owns and operates three brands — Oceania Cruises, Regent Seven Seas Cruises and Norwegian Cruise Line.
Norwegian Cruise Line Holdings’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 5.9% over the past 60 days. NCLH presently has a Zacks Rank #2.
Skechers U.S.A., Inc. designs, develops, markets and distributes footwear for men, women and children in the United States and overseas under the SKECHERS name, as well as under several uniquely branded names. SKX has distribution networks and joint venture partners in Asia and the Middle East, and wholly-owned subsidiaries in Canada, Japan, throughout Europe and Latin America.
Skechers U.S.A.’s expected earnings growth rate for the current year is 16.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. SKX presently carries a Zacks Rank #2.