Buy 6 Top-Ranked Surging S&P 500 Stocks To Gain More In 2020
Zacks Investment Research | Jan 23, 2020 07:08AM ET
Wall Street is firing on all cylinders since the beginning of this year, breaking one record after another. All three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have gained 2.3%, 2.8% and 4.6%, respectively, year to date.
The S&P 500 Index, generally considered as the barometer of market sentiment within the financial circle, closed in positive territory in nine of the first 14 trading days in this year. Moreover, the benchmark index reached a milestone on Jan 16 after closing, above the technical threshold of 3,300 for the first time.
In addition to the above-mentioned positives, a closer look into the S&P Index will reveal a more important feature. Several large-cap stocks (market capital >20 billion) within the index have already popped more than 10% year to date and still have strong upside left.
Future Drivers
A series of recently released economic data for December like retail sales, housing and manufacturing output confirms U.S. economic stability and clearly indicates that the historically longest expansionary phase is here to stay. Unemployment rate is currently at the lowest-level in 50 years. Inflation rate is 1.6%, well below the Fed’s 2% target rate.
The recently signed phase-one trade deal between the United States and China has significantly cooled down the nearly two-year old tariff war. The interim deal will at least help in restoring U.S. business confidence and global economic growth.
On Jan 16, 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.
Several economists and financial researchers have projected that the S&P 500 Index is likely to gain 15-20% in 2020 even though this is the U.S. presidential election year. Historically, the index provided 6.3% annual returns in presidential election years and was up 78% of the time.
Our Top Picks
We have narrowed down our search to six large-cap S&P 500 stocks that have surged more than 10% so far this year and still have upside left. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see Zacks Investment Research
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