5 Top Stocks That Popped In 2020 And Have Strong Upside Left
Zacks Investment Research | Jan 19, 2020 09:03PM ET
Wall Street is firing on all cylinders since the beginning of this year, breaking one record after another. It seems that the bulls have no intention of taking a breather after completing the best year in the last six years. This year’s momentum starts from where it ended in 2019.
Wall Street Bulls Are Raging
Investors’ enjoyed a fabulous 2019 wherein all three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 22.3%, 28.9% and 35.2%, respectively. The bull run continues as these indexes are already up 2.8%, 3.1% and 4.6%, respectively, year to date.
On Jan 17, the Dow, the S&P 500 and the Nasdaq Composite closed at 29,348.10, 3,329.62 and 9,388.94. Al three indexes achieved fresh all-time highs. Notably, in the first 12 trading days of this year, the S&P 500 and the Nasdaq Composite scored fresh closing highs half of the time. During these days, the Dow, the S&P 500 and Nasdaq Composite surpassed the respective key technical barriers of 29,000, 3,300 and 9,000.
For the week ended Jan 17, all three major indexes posted their largest percentage gains since the week ended Aug 30, 2018. The Dow finished in the positive territory in five of the past six weeks, the S&P 500 ended in the green for two successive weeks and the Nasdaq Composite maintained its winning streak for six straight weeks.
Future Drivers
The recently signed partial trade deal between the United States and China is a significant positive for Wall Street. Trade dispute was the major cause of market volatility in the past two years. The deal is expected to help the sagging manufacturing sector of the U.S. economy. Higher business spending and a likely recovery in the global economy are expected to boost U.S. exports.
An accommodative Fed has strengthened investors’ confidence in risky assets like equities. Fed’s timely intervention not only boosted the economy and raised investors’ confidence, but also helped the sagging U.S. housing market to recover with a low mortgage rate. Moreover, the central bank adopted a quantitative easing program by accelerating growth in its balance sheet.
The U.S. senate has approved the USMCA act that will replace the earlier NAFTA, the trade treaty between the United States, Canada and Mexico. This was one of the key trade-related renovations taken by President Donald Trump to boost U.S. exports. Finally, geopolitical escalation in Iran has cooled down.
Our Top Picks
At this stage, it will be a wise decision to invest in those stocks that already popped in the first three weeks of this year and still have strong momentum. We narrowed down our search to five such stocks each carries a Zacks Rank #1 (Strong Buy) and a Zacks Investment Research
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