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4 Stocks to Boost Your Portfolio as S&P 500 Hits New Milestone
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Wall Street has been on a rally this year, with all three major indexes hitting multiple all-time highs. The S&P 500 particularly has been the standout performer, with the index registering its 37th record close in 2024 on Jul 10.
On Wednesday, the S&P 500 closed at 5,633.91, closing above the 5,600 mark for the first time and recording its seventh straight day of gains.
The recent rally is being led by tech stocks, especially semiconductor giants, which have been at the heart of the ongoing enthusiasm surrounding artificial intelligence (AI). The AI darling NVIDIA Corporation (NVDA - Free Report) has been driving the overall rally. The company’s shares have gained 172.4% year to date.
Besides, the optimism surrounding rate cuts is also largely responsible for the ongoing rally. Inflation has finally started showing signs of easing after climbing in the first quarter. The consumer price index (CPI) held steady month over month in May after increasing 0.3% in April. May’s reading was also 0.1% lower than analysts’ estimates and the softest since July 2022.
Year over year, CPI rose 3.3%, which came in slightly below analysts’ expectations of a rise of 3.4%.
The Federal Reserve has indicated one rate cut this year, which is substantially lower than the three rate cuts projected earlier this year.
However, even a single 25 basis point rate cut has been welcomed, particularly because a large section of market participants had expected no rate cuts in 2024.
The latest FOMC "dot plot" indicates a projected total decrease of 1% in interest rates by 2025, potentially lowering the Fed funds rate to 4.1% by the end of that year. Markets are now pricing in a rate cut in September, with expectations of another cut by the end of the year if economic conditions look favorable.
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of 106.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.1% over the last 60 days. NVDA presently sports a Zacks Rank #1.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish its footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services (AWS).
Amazon.com has an expected earnings growth rate of 57.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 60 days. AMZN currently sports a Zacks Rank #1.
Apple Inc.’s business primarily runs around its flagship iPhone. However, the Services portfolio of AAPL, which includes revenues from cloud services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services, has now become the cash cow. Moreover, non-iPhone devices like Apple Watch and AirPod have gained significant traction.
Apple has an expected earnings growth rate of 7.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. APPL currently carries a Zacks Rank #2.
Broadcom Inc. is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. AVGO’s semiconductor solutions are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays.
Broadcom’s expected earnings growth rate for the current year is 12.2%. The Zacks Consensus Estimate for the current-year earnings has improved 0.9% over the past 60 days. AVGO currently carries a Zacks Rank #2.
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4 Stocks to Boost Your Portfolio as S&P 500 Hits New Milestone
Wall Street has been on a rally this year, with all three major indexes hitting multiple all-time highs. The S&P 500 particularly has been the standout performer, with the index registering its 37th record close in 2024 on Jul 10.
On Wednesday, the S&P 500 closed at 5,633.91, closing above the 5,600 mark for the first time and recording its seventh straight day of gains.
The recent rally is being led by tech stocks, especially semiconductor giants, which have been at the heart of the ongoing enthusiasm surrounding artificial intelligence (AI). The AI darling NVIDIA Corporation (NVDA - Free Report) has been driving the overall rally. The company’s shares have gained 172.4% year to date.
Besides, the optimism surrounding rate cuts is also largely responsible for the ongoing rally. Inflation has finally started showing signs of easing after climbing in the first quarter. The consumer price index (CPI) held steady month over month in May after increasing 0.3% in April. May’s reading was also 0.1% lower than analysts’ estimates and the softest since July 2022.
Year over year, CPI rose 3.3%, which came in slightly below analysts’ expectations of a rise of 3.4%.
The Federal Reserve has indicated one rate cut this year, which is substantially lower than the three rate cuts projected earlier this year.
However, even a single 25 basis point rate cut has been welcomed, particularly because a large section of market participants had expected no rate cuts in 2024.
The latest FOMC "dot plot" indicates a projected total decrease of 1% in interest rates by 2025, potentially lowering the Fed funds rate to 4.1% by the end of that year. Markets are now pricing in a rate cut in September, with expectations of another cut by the end of the year if economic conditions look favorable.
Our Choices
Given this scenario, it would be ideal to invest in S&P 500 stocks such as NVIDIA Corporation, Amazon.com, Inc. (AMZN - Free Report) , Apple Inc. (AAPL - Free Report) and Broadcom Inc. (AVGO - Free Report) thathave strong potential in 2024. These stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure good returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of 106.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.1% over the last 60 days. NVDA presently sports a Zacks Rank #1.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish its footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services (AWS).
Amazon.com has an expected earnings growth rate of 57.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 60 days. AMZN currently sports a Zacks Rank #1.
Apple Inc.’s business primarily runs around its flagship iPhone. However, the Services portfolio of AAPL, which includes revenues from cloud services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services, has now become the cash cow. Moreover, non-iPhone devices like Apple Watch and AirPod have gained significant traction.
Apple has an expected earnings growth rate of 7.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. APPL currently carries a Zacks Rank #2.
Broadcom Inc. is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. AVGO’s semiconductor solutions are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays.
Broadcom’s expected earnings growth rate for the current year is 12.2%. The Zacks Consensus Estimate for the current-year earnings has improved 0.9% over the past 60 days. AVGO currently carries a Zacks Rank #2.