Stocks have been on a tear this year. And the year is only halfway through.
YTD, the Dow is up 4.47%, the S&P is up 16.7%, and the Nasdaq is up 22.3%, with both the S&P and Nasdaq each making another new all-time high again on Friday. That’s the 33rd new high this year for the S&P, and the 21st for the Nasdaq.
And the best part is that it looks like there’s a lot more upside to go.
Especially after all of the major indexes finished in the green for the first half of the year, since that typically means more gains to follow in the second half.
So, I’m expecting the gains to continue throughout the rest of the year. And it’s easy to see why.
With a resilient economy, a strong jobs market, upward trending sales and earnings estimates, and household incomes remaining near record highs, it gives the market plenty of reason to keep moving higher.
Here are some additional reasons why the second half of 2024 is shaping up to be historic.
Presidential Cycle
Presidential election years have a long track-record of success.
And the 4-year Presidential Cycle perfectly illustrates this.
It shows that year 4 (that’s this year), is the second-best year of all four years (second only to year 3, which was last year, when the market gained 24%).
Simply put, stocks typically do well in Presidential election years.
And this year is shaping up to be another winner as well.
Other Statistical Trends Benefitting The Market
Even though we are in the midst of a strong bull market, which has seen a series of new highs after new highs this year, the market prior to that had gone 24 long months without setting a new high even once.
And it was only in January of this year that we finally eclipsed the previous all-time highs from January 2022.
I point this out because history shows in the previous 14 times when the S&P has gone at least a full year without a new high, and then finally made one - a year later it was higher in 13 out of those 14 times, and up nearly 15% on average.
Another interesting statistic, which points back to the big gains we saw in November of last year, also bodes well for more gains to come this year.
Once again, history shows that when the S&P was up by more than 8% in a single month (November 2023 was up by 8.91%), (this has happened 30 times since 1950), a year later the index was higher in 27 out of those 30 times (that’s 90% of the time), with an average return of 15.8%.
Pretty compelling stats.
It also sets a bullish tone for all of the other factors working in the market’s favor this year.
Continued . . .
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Alert: Buy These Ultimate Four Stocks Now
There's still time to get in early. These aren't just 4 promising stocks. They were handpicked from hundreds of strong companies by Zacks' experts because they present the greatest upside for Q3:
Stock #1: Specialty online retailer blasted more than +50% in a month – and analysts believe this is just the beginning.
Stock #2: Little-known oil company projected to grow earnings +75% this year, yet still has value metrics.
Stock #3: Tech manufacturer benefiting from the scorching hot demand for AI and data center solutions.
Stock #4: Crypto-focused financial firm with more bullish catalysts than ever before.
Deadline to download our just-released Ultimate Four Special Report is Sunday, July 7.
See Our “Ultimate” Stocks Now >>
------------------------------------------------------------------------------------------------------
Peak Inflation Is Behind Us
After a brief pause earlier in the year, inflation is heading back down.
Fed Chairman Jerome Powell, just last week, said there’s been “good progress on inflation” and that we “are getting back on the disinflationary path.”
It’s clear that peak inflation is behind us. And each report shows more progress being made.
A few weeks ago, the Producer Price Index (PPI, wholesale), showed core inflation (ex-food & energy) at 2.3% y/y, down from last month’s 2.5%, and well below 2022’s peak of 8.2%.
The Consumer Price Index (CPI, retail) showed core inflation at 3.4% y/y, below last month’s 3.6%, and below their peak of 6.6%.
And the latest Personal Consumption Expenditures (PCE) index (the Fed’s preferred inflation gauge), was at 2.6% y/y, down from last month’s 2.8%, and below their peak of 5.3%.
With that, the Fed is forecasting 1 rate cut by year’s end (presumably by 25 basis points).
The odds now favor September at the earliest (78% chance), with odds growing even greater for November (87% chance), and greater still for December (97% chance).
And that’s bullish for the market.
Quite frankly, the market has been doing just fine without rate cuts.
But when they come, they will be cheered. And since the market is forward-looking, no need to wait until they happen. Knowing they’re coming is enough.
The Outlook Is For Growth
Just the other month, the International Monetary Fund (IMF) raised their global growth forecast to 3.2%, up from January’s forecast of 3.1%.
They also gave the U.S. the biggest upside revision, upping their growth forecast to 2.7% from their previous estimate of 2.1%.
The Eurozone saw a slight downward revision, but is still expected to grow by 0.8% from the previously expected 0.9%, while China is expected to grow by 4.6%, and India is expected to increase by 6.8%.
But the IMF specifically singled out the U.S. as being a major driver of global growth this year.
And Mr. Powell concurred with the strong assessment for the U.S. economy, saying “more recent data shows solid growth and continued strength in the labor market.”
While some may suggest that the strength in the U.S. economy is at odds with easing inflation, nobody is making a case for a recession anytime soon.
And a growing economy goes hand in hand with a bull market.
Increasing Earnings
Earnings season is always an exciting time since stocks typically go up during earnings season.
The latest earnings season was no different.
And with a new earnings season upon us once again, we should see more gains to come.
Especially with earnings and sales estimates on the rise. Last quarter’s earnings season (Q1’24) showed S&P earnings up 7.0% and sales up 4.4%. This earnings season (Q2’24) is expected to show earnings up 8.6% and sales up 4.7%.
And the excitement looks set to continue after that with Q3’24 expected to show earnings up 6.9% and sales up 4.9%. And Q4’24 expected to show earnings up 12.7% and sales up 5.6%.
The earnings picture is one of improvement, and another bullish indicator underpinning the market.
Stocks Are Undervalued
While the P/E ratio for the S&P has risen over the last couple of years, they are still down sharply from 2021’s peak, and are below where they were the last time stocks were anywhere near this level.
And that makes stocks a bargain.
Then when you factor in the increasing earnings estimates, stocks look even more undervalued.
Transformational Boom
Let’s also not forget we are in the midst of a historic AI boom. And with no end in sight, we could see stocks soar to unimaginable heights.
There will no doubt be bumps along the way. But we are seeing something truly spectacular taking place as AI is expected to touch virtually every industry in some way shape or form, as well as impact ordinary lives.
In fact, AI is shaping up to be just as transformative, if not more so, than the personal computer, the internet, and the mobile phone.
Fortunes will be made along the way. Plenty already have. With plenty more to come.
Do What Works
So how do you fully take advantage of the market right now?
By implementing tried and true methods that work.
For example, did you know that stocks with a Zacks Rank #1 Strong Buy have beaten the market in 29 of the last 36 years (an 81% win ratio) with an average annual return of more than 24% per year? That's more than 2 x the S&P, including 4 bear markets and 4 recessions. And consistently beating the market year after year can add up to a lot more than just two times the returns.
Did you also know that stocks in the top 50% of Zacks Ranked Industries outperform those in the bottom 50% by a factor of 2 to 1? There's a reason why they say that half of a stock's price movement can be attributed to the group that it's in. Because it's true!
Those two things will give any investor a huge probability of success and put you well on your way to beating the market.
But you’re not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 100 or so. Way too many to trade at once.
So, the next step is to get that list down to the best 5-10 stocks that you can buy.
Stock Picking Secrets of the Pros
One of the best ways to find better stocks and make better decisions is to see what the pros, who use these methods, are picking.
Whether you’re a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains.
This applies to large-caps and small-caps, biotech and high-tech, ETFs, stocks under $10, stocks about to surprise, even options, and everything in between.
Regardless of which one fits your personal style of trade, just be sure you’re following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market.
The best part about these strategies and stock picks is that all of the hard work is done for you. There’s no guesswork involved. Just follow the experts and start confidently getting into better stocks on your very next trade.
What The Pros Are Picking In Q3
Using the market-doubling Zacks Rank as a foundation, our experts have hand-picked 4 stocks poised to outperform this quarter. And today, we’re revealing these high-potential recommendations to our readers:
Stock #1: A specialty online retailer making a monster comeback. After crushing recent earnings expectations, the stock blasted more than +50% off recent lows – and analysts believe this is just the beginning.
Stock #2: A little-known oil company poised to surge higher as energy prices increase. Earnings are projected to grow +75% this year, and despite rapid growth, it still has spectacular value metrics.
Stock #3: A tech manufacturer benefiting from megatrends like the scorching hot demand for data center solutions. As the AI boom continues, this company’s products could skyrocket in popularity.
Stock #4: A financial firm innovating in the cryptocurrency space. With Wall Street increasingly accepting Bitcoin and other cryptos as a mainstream asset class, more bullish catalysts exist than ever before.
Download our just-released Ultimate Four Special Report.
You can be one of the first to see these promising recommendations when you download this Special Report today. Opportunity ends at midnight Sunday, July 7.
See our Ultimate Four stocks now >>
Thanks and good trading,
Kevin
Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to download Zacks' just-released Ultimate Four Special Report before this weekend's deadline.
Image: Bigstock
Why Stocks Are On Pace For A Historic Second Half
Stocks have been on a tear this year. And the year is only halfway through.
YTD, the Dow is up 4.47%, the S&P is up 16.7%, and the Nasdaq is up 22.3%, with both the S&P and Nasdaq each making another new all-time high again on Friday. That’s the 33rd new high this year for the S&P, and the 21st for the Nasdaq.
And the best part is that it looks like there’s a lot more upside to go.
Especially after all of the major indexes finished in the green for the first half of the year, since that typically means more gains to follow in the second half.
So, I’m expecting the gains to continue throughout the rest of the year. And it’s easy to see why.
With a resilient economy, a strong jobs market, upward trending sales and earnings estimates, and household incomes remaining near record highs, it gives the market plenty of reason to keep moving higher.
Here are some additional reasons why the second half of 2024 is shaping up to be historic.
Presidential Cycle
Presidential election years have a long track-record of success.
And the 4-year Presidential Cycle perfectly illustrates this.
It shows that year 4 (that’s this year), is the second-best year of all four years (second only to year 3, which was last year, when the market gained 24%).
Simply put, stocks typically do well in Presidential election years.
And this year is shaping up to be another winner as well.
Other Statistical Trends Benefitting The Market
Even though we are in the midst of a strong bull market, which has seen a series of new highs after new highs this year, the market prior to that had gone 24 long months without setting a new high even once.
And it was only in January of this year that we finally eclipsed the previous all-time highs from January 2022.
I point this out because history shows in the previous 14 times when the S&P has gone at least a full year without a new high, and then finally made one - a year later it was higher in 13 out of those 14 times, and up nearly 15% on average.
Another interesting statistic, which points back to the big gains we saw in November of last year, also bodes well for more gains to come this year.
Once again, history shows that when the S&P was up by more than 8% in a single month (November 2023 was up by 8.91%), (this has happened 30 times since 1950), a year later the index was higher in 27 out of those 30 times (that’s 90% of the time), with an average return of 15.8%.
Pretty compelling stats.
It also sets a bullish tone for all of the other factors working in the market’s favor this year.
Continued . . .
------------------------------------------------------------------------------------------------------
Alert: Buy These Ultimate Four Stocks Now
There's still time to get in early. These aren't just 4 promising stocks. They were handpicked from hundreds of strong companies by Zacks' experts because they present the greatest upside for Q3:
Stock #1: Specialty online retailer blasted more than +50% in a month – and analysts believe this is just the beginning.
Stock #2: Little-known oil company projected to grow earnings +75% this year, yet still has value metrics.
Stock #3: Tech manufacturer benefiting from the scorching hot demand for AI and data center solutions.
Stock #4: Crypto-focused financial firm with more bullish catalysts than ever before.
Deadline to download our just-released Ultimate Four Special Report is Sunday, July 7.
See Our “Ultimate” Stocks Now >>
------------------------------------------------------------------------------------------------------
Peak Inflation Is Behind Us
After a brief pause earlier in the year, inflation is heading back down.
Fed Chairman Jerome Powell, just last week, said there’s been “good progress on inflation” and that we “are getting back on the disinflationary path.”
It’s clear that peak inflation is behind us. And each report shows more progress being made.
A few weeks ago, the Producer Price Index (PPI, wholesale), showed core inflation (ex-food & energy) at 2.3% y/y, down from last month’s 2.5%, and well below 2022’s peak of 8.2%.
The Consumer Price Index (CPI, retail) showed core inflation at 3.4% y/y, below last month’s 3.6%, and below their peak of 6.6%.
And the latest Personal Consumption Expenditures (PCE) index (the Fed’s preferred inflation gauge), was at 2.6% y/y, down from last month’s 2.8%, and below their peak of 5.3%.
With that, the Fed is forecasting 1 rate cut by year’s end (presumably by 25 basis points).
The odds now favor September at the earliest (78% chance), with odds growing even greater for November (87% chance), and greater still for December (97% chance).
And that’s bullish for the market.
Quite frankly, the market has been doing just fine without rate cuts.
But when they come, they will be cheered. And since the market is forward-looking, no need to wait until they happen. Knowing they’re coming is enough.
The Outlook Is For Growth
Just the other month, the International Monetary Fund (IMF) raised their global growth forecast to 3.2%, up from January’s forecast of 3.1%.
They also gave the U.S. the biggest upside revision, upping their growth forecast to 2.7% from their previous estimate of 2.1%.
The Eurozone saw a slight downward revision, but is still expected to grow by 0.8% from the previously expected 0.9%, while China is expected to grow by 4.6%, and India is expected to increase by 6.8%.
But the IMF specifically singled out the U.S. as being a major driver of global growth this year.
And Mr. Powell concurred with the strong assessment for the U.S. economy, saying “more recent data shows solid growth and continued strength in the labor market.”
While some may suggest that the strength in the U.S. economy is at odds with easing inflation, nobody is making a case for a recession anytime soon.
And a growing economy goes hand in hand with a bull market.
Increasing Earnings
Earnings season is always an exciting time since stocks typically go up during earnings season.
The latest earnings season was no different.
And with a new earnings season upon us once again, we should see more gains to come.
Especially with earnings and sales estimates on the rise. Last quarter’s earnings season (Q1’24) showed S&P earnings up 7.0% and sales up 4.4%. This earnings season (Q2’24) is expected to show earnings up 8.6% and sales up 4.7%.
And the excitement looks set to continue after that with Q3’24 expected to show earnings up 6.9% and sales up 4.9%. And Q4’24 expected to show earnings up 12.7% and sales up 5.6%.
The earnings picture is one of improvement, and another bullish indicator underpinning the market.
Stocks Are Undervalued
While the P/E ratio for the S&P has risen over the last couple of years, they are still down sharply from 2021’s peak, and are below where they were the last time stocks were anywhere near this level.
And that makes stocks a bargain.
Then when you factor in the increasing earnings estimates, stocks look even more undervalued.
Transformational Boom
Let’s also not forget we are in the midst of a historic AI boom. And with no end in sight, we could see stocks soar to unimaginable heights.
There will no doubt be bumps along the way. But we are seeing something truly spectacular taking place as AI is expected to touch virtually every industry in some way shape or form, as well as impact ordinary lives.
In fact, AI is shaping up to be just as transformative, if not more so, than the personal computer, the internet, and the mobile phone.
Fortunes will be made along the way. Plenty already have. With plenty more to come.
Do What Works
So how do you fully take advantage of the market right now?
By implementing tried and true methods that work.
For example, did you know that stocks with a Zacks Rank #1 Strong Buy have beaten the market in 29 of the last 36 years (an 81% win ratio) with an average annual return of more than 24% per year? That's more than 2 x the S&P, including 4 bear markets and 4 recessions. And consistently beating the market year after year can add up to a lot more than just two times the returns.
Did you also know that stocks in the top 50% of Zacks Ranked Industries outperform those in the bottom 50% by a factor of 2 to 1? There's a reason why they say that half of a stock's price movement can be attributed to the group that it's in. Because it's true!
Those two things will give any investor a huge probability of success and put you well on your way to beating the market.
But you’re not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 100 or so. Way too many to trade at once.
So, the next step is to get that list down to the best 5-10 stocks that you can buy.
Stock Picking Secrets of the Pros
One of the best ways to find better stocks and make better decisions is to see what the pros, who use these methods, are picking.
Whether you’re a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains.
This applies to large-caps and small-caps, biotech and high-tech, ETFs, stocks under $10, stocks about to surprise, even options, and everything in between.
Regardless of which one fits your personal style of trade, just be sure you’re following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market.
The best part about these strategies and stock picks is that all of the hard work is done for you. There’s no guesswork involved. Just follow the experts and start confidently getting into better stocks on your very next trade.
What The Pros Are Picking In Q3
Using the market-doubling Zacks Rank as a foundation, our experts have hand-picked 4 stocks poised to outperform this quarter. And today, we’re revealing these high-potential recommendations to our readers:
Stock #1: A specialty online retailer making a monster comeback. After crushing recent earnings expectations, the stock blasted more than +50% off recent lows – and analysts believe this is just the beginning.
Stock #2: A little-known oil company poised to surge higher as energy prices increase. Earnings are projected to grow +75% this year, and despite rapid growth, it still has spectacular value metrics.
Stock #3: A tech manufacturer benefiting from megatrends like the scorching hot demand for data center solutions. As the AI boom continues, this company’s products could skyrocket in popularity.
Stock #4: A financial firm innovating in the cryptocurrency space. With Wall Street increasingly accepting Bitcoin and other cryptos as a mainstream asset class, more bullish catalysts exist than ever before.
Download our just-released Ultimate Four Special Report.
You can be one of the first to see these promising recommendations when you download this Special Report today. Opportunity ends at midnight Sunday, July 7.
See our Ultimate Four stocks now >>
Thanks and good trading,
Kevin
Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to download Zacks' just-released Ultimate Four Special Report before this weekend's deadline.