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Dow Records Sixth Straight Weekly Gain: 4 Top Picks
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Wall Street continues to gain momentum in February, following its record January performance in three decades. Positive developments on trade war front, Fed’s dovish monetary stance and stabilization of oil prices acted as primary catalysts behind the stock market rally.
The Dow 30 – one of the three major stock indexes of the U.S. market – finished in the red in 2018. However, the blue-chip index has also returned to the positive territory on the heels of Wall Street recovery in 2019. Consequently, it will be a prudent move to invest in Dow stocks with a favorable Zacks Rank.
Dow Rally Continues
Last year was extremely disappointing for the Dow. The index plunged 5.6% recording its worst ever yearly performance since 2008. The Dow starts 2019 with strong momentum. With the week ended Feb 1, the blue chip recorded sixth straight weekly gain. Year to date, the index is up 8.2%. Moreover, 26 components of the 30-stock index have provided positive returns so far this year.
Positive Developments on Trade War Front
On Jan 31, President Donald Trump told reporters that he is hopeful of forging a deal with China before the March deadline. Notably, the two countries are currently observing a trade truce which will come to end on Mar 1. Moreover, CNBC reported citing sources that officials of the two countries are trying for a meeting between President Trump and his Chinese counterpart Xi Jinping in late February. This will be the second meeting between the two leaders in less than three months.
Crude Oil Prices Stabilize
On Feb 4, the U.S. benchmark West Texas Intermediate (WTI) crude closed at $54.56 a barrel on the New York Mercantile Exchange. WTI crude price rose 18.5% in January, marking its best monthly gain since April 2016 and best January performance since 1984. On Feb 4, the global benchmark Brent crude closed at $62.51 a barrel on ICE Futures Europe. Brent crude price rose 15% in January, marking its best monthly gain since April 2016.
Decision by the OPEC and its allies to cut production 1.2 million barrels per day (bpd) in 2019 and supply disruption owing to U.S. sanctions on Iran and Venezuela are the primary reasons for oil price stabilization.
Fed to Remain Patient Regarding Monetary Policy
On Jan 30, the Federal Reserve decided to keep the federal funds target rate unchanged in the range of 2.25% - 2.50%. Fed Chairman Jerome Powell stated that the central bank will be patient while taking a call on future rate hike.
Instead of following a predetermined path, Fed will consider all economic parameters and market conditions carefully before reaching a decision. The central bank’s bond portfolio reduction strategy will also consider macro-economic metrics and trade related disruptions, and is not on “autopilot”, as suggested by the Fed Chair in December.
Our Top Picks
At this stage, it will be a prudent move to invest in Dow 30 stocks. We have narrowed down our search to four such stocks. Each of our picks has either a Zacks Rnak #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below depicts price performance of our four picks in the last three months.
The Boeing Co. (BA - Free Report) : The company recorded positive earnings surprise of 17.1% in the last four quarters. It carries a Zacks Rank #1. The company has expected earnings growth of 19.1% for current year. The Zacks Consensus Estimate for the current year has improved by 5.4% over the last 60 days.
UnitedHealth Group Inc. (UNH - Free Report) : The company recorded positive earnings surprise of 3.4% in the last four quarters. It carries a Zacks Rank #2. The company has expected earnings growth of 13.5% for current year. The Zacks Consensus Estimate for the current year has improved by 0.1% over the last 60 days.
The Procter & Gamble Co. (PG - Free Report) : The company recorded positive earnings surprise of 3.1% in the last four quarters. It carries a Zacks Rank #2. The company has expected earnings growth of 5.7% for current year. The Zacks Consensus Estimate for the current year has improved by 1.1% over the last 60 days.
United Technologies Corp. : The company recorded positive earnings surprise of 14.9% in the last four quarters. It carries a Zacks Rank #2. The company has expected earnings growth of 9.7% for current year. The Zacks Consensus Estimate for the current year has improved by 2.3% over the last 60 days.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
Image: Bigstock
Dow Records Sixth Straight Weekly Gain: 4 Top Picks
Wall Street continues to gain momentum in February, following its record January performance in three decades. Positive developments on trade war front, Fed’s dovish monetary stance and stabilization of oil prices acted as primary catalysts behind the stock market rally.
The Dow 30 – one of the three major stock indexes of the U.S. market – finished in the red in 2018. However, the blue-chip index has also returned to the positive territory on the heels of Wall Street recovery in 2019. Consequently, it will be a prudent move to invest in Dow stocks with a favorable Zacks Rank.
Dow Rally Continues
Last year was extremely disappointing for the Dow. The index plunged 5.6% recording its worst ever yearly performance since 2008. The Dow starts 2019 with strong momentum. With the week ended Feb 1, the blue chip recorded sixth straight weekly gain. Year to date, the index is up 8.2%. Moreover, 26 components of the 30-stock index have provided positive returns so far this year.
Positive Developments on Trade War Front
On Jan 31, President Donald Trump told reporters that he is hopeful of forging a deal with China before the March deadline. Notably, the two countries are currently observing a trade truce which will come to end on Mar 1. Moreover, CNBC reported citing sources that officials of the two countries are trying for a meeting between President Trump and his Chinese counterpart Xi Jinping in late February. This will be the second meeting between the two leaders in less than three months.
Crude Oil Prices Stabilize
On Feb 4, the U.S. benchmark West Texas Intermediate (WTI) crude closed at $54.56 a barrel on the New York Mercantile Exchange. WTI crude price rose 18.5% in January, marking its best monthly gain since April 2016 and best January performance since 1984. On Feb 4, the global benchmark Brent crude closed at $62.51 a barrel on ICE Futures Europe. Brent crude price rose 15% in January, marking its best monthly gain since April 2016.
Decision by the OPEC and its allies to cut production 1.2 million barrels per day (bpd) in 2019 and supply disruption owing to U.S. sanctions on Iran and Venezuela are the primary reasons for oil price stabilization.
Fed to Remain Patient Regarding Monetary Policy
On Jan 30, the Federal Reserve decided to keep the federal funds target rate unchanged in the range of 2.25% - 2.50%. Fed Chairman Jerome Powell stated that the central bank will be patient while taking a call on future rate hike.
Instead of following a predetermined path, Fed will consider all economic parameters and market conditions carefully before reaching a decision. The central bank’s bond portfolio reduction strategy will also consider macro-economic metrics and trade related disruptions, and is not on “autopilot”, as suggested by the Fed Chair in December.
Our Top Picks
At this stage, it will be a prudent move to invest in Dow 30 stocks. We have narrowed down our search to four such stocks. Each of our picks has either a Zacks Rnak #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below depicts price performance of our four picks in the last three months.
The Boeing Co. (BA - Free Report) : The company recorded positive earnings surprise of 17.1% in the last four quarters. It carries a Zacks Rank #1. The company has expected earnings growth of 19.1% for current year. The Zacks Consensus Estimate for the current year has improved by 5.4% over the last 60 days.
UnitedHealth Group Inc. (UNH - Free Report) : The company recorded positive earnings surprise of 3.4% in the last four quarters. It carries a Zacks Rank #2. The company has expected earnings growth of 13.5% for current year. The Zacks Consensus Estimate for the current year has improved by 0.1% over the last 60 days.
The Procter & Gamble Co. (PG - Free Report) : The company recorded positive earnings surprise of 3.1% in the last four quarters. It carries a Zacks Rank #2. The company has expected earnings growth of 5.7% for current year. The Zacks Consensus Estimate for the current year has improved by 1.1% over the last 60 days.
United Technologies Corp. : The company recorded positive earnings surprise of 14.9% in the last four quarters. It carries a Zacks Rank #2. The company has expected earnings growth of 9.7% for current year. The Zacks Consensus Estimate for the current year has improved by 2.3% over the last 60 days.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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