The Zacks Analyst Blog Highlights: Crocs, Penn National, Whirlpool, Comcast And Wyndham
Zacks Investment Research | Aug 08, 2019 11:36PM ET
For Immediate Release
Chicago, IL –August 9, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Crocs, Inc. (NASDAQ:CROX) , Penn National Gaming, Inc. (NASDAQ:PENN) , Whirlpool Corporation (NYSE:WHR) , Comcast Corporation (NASDAQ:CMCSA) and Wyndham Destinations, Inc. (NYSE:WYND) .
Here are highlights from Thursday’s Analyst Blog:
Ignore Trade War, Focus on U.S. Economy: 5 Top Picks
Early on Aug 8, China fired the latest salvo in the long-running U.S.-China trade war. The People’s Bank of China set the yuan’s daily reference rate at 7.0039 against one U.S. dollar. This is the lowest level experienced since Apr 21, 2008. When the yuan breached the psychological level of 7 per dollar on Aug 5, the Treasury department was quick to call China a currency manipulator.
Meanwhile, U.S. markets suffered a volatile day of trading on Aug 7, indicating that Wall Street’s mood was being dictated by the yuan. But economists and experts alike feel that equity markets should focus on America’s strong fundamentals instead of being swayed by external pressures.
Despite the slowdown in progress, the U.S. economy remains robust, mostly because of strong consumer spending, which contributes the largest share of GDP. This is why it makes sense to invest in select consumer discretionary stocks at this time.
Services Gauges Strong, Expansion Continuing
Earlier this week, key services gauges showed that the U.S. economy continues to expand, though the pace of growth was slowing. The Institute of Supply Management’s (ISM) services index declined from 55.1 in June to 53.7 in July, but remained robust enough. Meanwhile, IHS Markit’s services gauge exceeded estimates to hit a level of 53 for the same period.
These readings are seen as a reliable indicator of America’s economic health since services contribute nearly 85% of total GDP growth. The respondents of the ISM survey remained concerned about the likely fallout of the trade war. But the economy is continuing to expand. A slowdown is in the works, but respondents feel “clients are not balking” at the price rises caused by tariffs.
Economic Indicators Robust, Recession Unlikely
Earlier this month, the Department of Labor released nonfarm payroll numbers for July. The U.S. economy added 164,000 jobs last month, marginally lower than the estimated level of 165,000. In fact, job growth has continued for 106 straight months, the longest winning streak on record.
Further, unemployment remains at a 50-year low of 3.7%. In fact, the figure has remained at 4% or lower for 16 straight months, the longest period in 50 years. There is enough evidence to indicate that wages are increasing at their fastest ever pace for historically lower-paying industries. This is largely an outcome of state-level hikes in minimum wage and persistently low unemployment.
And this is probably why economists feel that though a slowdown is underway, a near-term recession is highly unlikely. According to the latest Commerce Department figures, U.S. GDP hit a pace of 2.1% in the second quarter, lower than the rate of 3.1% witnessed in the first quarter. However, this was still largely above expectations and fueled by a robust increase in consumer spending.
Our Choices
The volatile session witnessed on Aug 7 is likely a symptom of the panic created by China’s currency-led retaliatory measures. At this time, investors would be advised to ignore ongoing trade tensions and focus on robust domestic economic fundamentals. Most indicators show that though a slowdown is in progress, a near-term recession seems highly unlikely.
Investing in consumer discretionary stocks, the powerhouse of the U.S. economy, remains prudent at this time. However, picking winning stocks may be difficult.
This is where our Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.