Ring In 2019 With These 7 Solid Growth Stocks In Your Kitty
Zacks Investment Research | Dec 23, 2018 08:39PM ET
Stocks have been on a topsy-turvy ride in 2018, thanks to the U.S.-China trade war, uncertainty over Brexit, budget concern in Italy, a stronger dollar that hurt emerging markets, tech weakness and volatile oil prices due to ongoing geopolitical tensions. Moreover, the U.S. Federal Reserve’s hawkish stance related to interest rate hikes, and fears of a prolonged federal government shutdown over the U.S-Mexico border security funding issue weighed on the stock market.
Investors fear that several of these headwinds will continue to drag down stock performance in 2019 as well. Notably, several companies have lowered their 2019 outlook factoring in the impact of the tariffs imposed as a result of the trade war.
The increase in tariff from 10% to 25% (on hold till Mar 1, 2019) on $200 billion worth of Chinese imports, if imposed, will have a significant impact on companies’ profits. Besides, with the tariff being passed on to consumers in the form of higher prices, it will also take a toll on their spending.
Moreover, the impact of the tax cut has already started to fade and the back-to-back rate hikes by Fed have also not gone down well with investors. The Fed recently hiked interest rates for the fourth time this year and projected two hikes for 2019. However, it did strike a dovish note by reducing projected rate hikes from three to two.
Although it is not clear how 2019 will unfold for the markets, the uncertain trade war truce and enhanced labor market may turn things around on the bourses.
Per Goldman Sachs (NYSE:GS), robust wage growth and recent declines in oil price are likely to sustain higher disposable income and boost spending in the coming year.
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Growth stocks are fundamentally strong businesses that ensure solid portfolio returns. The Zacks Original post
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