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4 Blue-Chip Stocks to Bet on as Dow Hits Fresh All-Time High
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It has been a great 2024 for Wall Street, with all three major indexes hitting multiple record highs. Easing inflation and price pressures have raised optimism surrounding rate cuts, which have fueled the rally.
Dow Hits New Record High
On Jul 15, the Dow edged up 0.5% to close at a record high of 40,211.72 points, to register its 20th record close this year. This is also the blue-chip 30 stock index’s first record close since May 17.
Year to date, the index has gained 6.7% and has now ended in positive territory for the fourth straight session.
This year’s rally has been primarily driven by tech and semiconductor stocks, which have been boosting the S&P 500 and the Nasdaq. The value-oriented Dow has been slow in the race but has still put up an impressive show.
The Dow’s recent rally is being driven by positive economic data. The consumer price index (CPI) declined 0.1% sequentially in June after remaining unchanged in the previous month and recording its first decline since May 2020. On a year-over-year basis, CPI rose 3.3%, the smallest increase since April 2021.
Core CPI, which excludes the volatile food and energy prices, also rose 0.1% month over month in June and 3.3% from the year-ago levels. Year-over-year, core CPI was also the smallest since April 2021.
Rate Cut Hopes Rise
Inflation unexpectedly resumed its climb in the first quarter after declining sharply in 2023, thanks to the Federal Reserve’s aggressive monetary tightening campaign that saw interest rates being hiked by 525 basis points.
The Federal Reserve is now gearing up for rate cuts, as inflation continues to decline. Last month, Federal Reserve Chairman Jerome Powell, in his first post-FOMC meeting statement, said that the central bank now sees only one rate cut in 2024.
However, even a single 25 basis point rate cut is good news, given that market participants had expected no rate cuts in 2024.
Moreover, the latest FOMC "dot plot," suggests a planned cumulative rate cut of 1% by 2025, which will take the Fed funds rate down to 4.1% by the end of next year. Currently, markets are pricing a rate cut in September, with the possibility of another before the year-end if inflation continues to decline sharply.
Our Picks
Given the positive sentiment and bright outlook, investors should bet on these four fundamentally strong blue-chip stocks, namely JPMorgan Chase & Co. (JPM - Free Report) , Amazon.com, Inc. (AMZN - Free Report) , Apple Inc. (AAPL - Free Report) and Walmart, Inc. (WMT - Free Report) . These companies are strategically positioned to take advantage of the overall upward trend in the market. 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.
JPMorgan Chase & Co. is one of the biggest global banks with assets worth $4.09 trillion and stockholders’ equity worth $336.6 billion as of Mar 31, 2024. With operations in more than 60 countries, JPM is one of the largest financial service firms in the world.
JPMorgan Chase has an expected earnings growth rate of 1.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the last 60 days. JPM currently carries a Zacks Rank #2.
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 a 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.
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 presently carries a Zacks Rank #2.
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. AAPL currently has a Zacks Rank #2.
Walmart has evolved from just being a traditional brick-and-mortar retailer to an omnichannel player. WMT’s product offerings include almost everything from grocery to cosmetics, electronics to stationery, home furnishings to health and wellness products, and apparel to entertainment products, to name a few.
Walmart’s expected earnings growth rate for the current year is 9.5%. The Zacks Consensus Estimate for current-year earnings has improved 3% over the past 60 days. WMT presently has a Zacks Rank #2.
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4 Blue-Chip Stocks to Bet on as Dow Hits Fresh All-Time High
It has been a great 2024 for Wall Street, with all three major indexes hitting multiple record highs. Easing inflation and price pressures have raised optimism surrounding rate cuts, which have fueled the rally.
Dow Hits New Record High
On Jul 15, the Dow edged up 0.5% to close at a record high of 40,211.72 points, to register its 20th record close this year. This is also the blue-chip 30 stock index’s first record close since May 17.
Year to date, the index has gained 6.7% and has now ended in positive territory for the fourth straight session.
This year’s rally has been primarily driven by tech and semiconductor stocks, which have been boosting the S&P 500 and the Nasdaq. The value-oriented Dow has been slow in the race but has still put up an impressive show.
The Dow’s recent rally is being driven by positive economic data. The consumer price index (CPI) declined 0.1% sequentially in June after remaining unchanged in the previous month and recording its first decline since May 2020. On a year-over-year basis, CPI rose 3.3%, the smallest increase since April 2021.
Core CPI, which excludes the volatile food and energy prices, also rose 0.1% month over month in June and 3.3% from the year-ago levels. Year-over-year, core CPI was also the smallest since April 2021.
Rate Cut Hopes Rise
Inflation unexpectedly resumed its climb in the first quarter after declining sharply in 2023, thanks to the Federal Reserve’s aggressive monetary tightening campaign that saw interest rates being hiked by 525 basis points.
The Federal Reserve is now gearing up for rate cuts, as inflation continues to decline. Last month, Federal Reserve Chairman Jerome Powell, in his first post-FOMC meeting statement, said that the central bank now sees only one rate cut in 2024.
However, even a single 25 basis point rate cut is good news, given that market participants had expected no rate cuts in 2024.
Moreover, the latest FOMC "dot plot," suggests a planned cumulative rate cut of 1% by 2025, which will take the Fed funds rate down to 4.1% by the end of next year. Currently, markets are pricing a rate cut in September, with the possibility of another before the year-end if inflation continues to decline sharply.
Our Picks
Given the positive sentiment and bright outlook, investors should bet on these four fundamentally strong blue-chip stocks, namely JPMorgan Chase & Co. (JPM - Free Report) , Amazon.com, Inc. (AMZN - Free Report) , Apple Inc. (AAPL - Free Report) and Walmart, Inc. (WMT - Free Report) . These companies are strategically positioned to take advantage of the overall upward trend in the market. 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.
JPMorgan Chase & Co. is one of the biggest global banks with assets worth $4.09 trillion and stockholders’ equity worth $336.6 billion as of Mar 31, 2024. With operations in more than 60 countries, JPM is one of the largest financial service firms in the world.
JPMorgan Chase has an expected earnings growth rate of 1.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the last 60 days. JPM currently carries a Zacks Rank #2.
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 a 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.
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 presently carries a Zacks Rank #2.
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. AAPL currently has a Zacks Rank #2.
Walmart has evolved from just being a traditional brick-and-mortar retailer to an omnichannel player. WMT’s product offerings include almost everything from grocery to cosmetics, electronics to stationery, home furnishings to health and wellness products, and apparel to entertainment products, to name a few.
Walmart’s expected earnings growth rate for the current year is 9.5%. The Zacks Consensus Estimate for current-year earnings has improved 3% over the past 60 days. WMT presently has a Zacks Rank #2.