The Zacks Analyst Blog Highlights: Fortinet, Martin Marietta Materials, Synopsys, Applied Materials And Copart
Zacks Investment Research | Dec 30, 2019 08:30PM ET
For Immediate Release
Chicago, IL – December 31, 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: Fortinet Inc. (NASDAQ:FTNT) , Martin Marietta Materials Inc. (NYSE:MLM) , Synopsys Inc. (NASDAQ:SNPS) , Applied Materials Inc. (NASDAQ:AMAT) and Copart Inc. (NASDAQ:CPRT) .
Here are highlights from Monday’s Analyst Blog:
Will the S&P 500 Record Highest Returns Since 1997? 5 Picks
The impressive turnaround by Wall Street in 2019, after the market mayhem of 2018, is set to reach a milestone at the end of this year. Buoyed by a likely interim trade deal with China in early January, solid economic data and a dovish Fed, the S&P 500 Index is set to return the highest since 1997. The benchmark index is recording fresh highs almost regularly in December.
S&P 500 on the Verge of Touching a Milestone
On Dec 27, the S&P 500 Index achieved a new record high after closing at 3,240.02. Year to date, the broad-market index has rallied almost 29.3%. It is currently at a striking distance to surpass its annual return of 29.6% posted in 2013. Notably, so far, 2013 marked the best annual return for the S&P 500 Index since 1997, when it jumped a little more than 31%.
At this stage, the possibility of the S&P 500 Index crossing 29.6% returns this year is highly likely as two more trading days are still left. Moreover, this is the period of so-called Santa rally, consisting of the last five trading days of one year and first two trading days of the next year. Historically, the benchmark index has returned 1.3% during Santa rally.
Moreover, the S&P 500 Index is now firmly above its psychological barrier of the 3,000 mark. The index touched 3,000 for the first time on Jul 10 and its first closing above 3,000 was recorded on Jul 12. This means that the index rallied around 8% in past five and half months. This performance is in sharp contrast with 2018 when the index plunged 6.24% for the year as a whole. The S&P 500 ended 2018 at 2,506.85 and the 3,000 mark was nowhere near sight.
Will S&P 500’s Bull Run Continue?
The three positive factors mentioned in the first paragraph are the major catalysts for the index. As per a recent CNBC survey, analysts are projecting an average 3,320 for the S&P Index by the end of 2020. Notably, 2020 will be the year of presidential elections. Historically, the index provided 6.3% annual returns in presidential election years and was up 78% of the time.
The biggest driver for the S&P 500’s rebound in 2019 is the technology sector, which has skyrocketed 48.3% year to date, well above the index’s gain of 29.3%. A trade deal with China will benefit the technology sector the most. China is the largest market for the high-tech products of U.S. companies.
At the same time, China plays the role of a low-cost supplier of intermediary products and other inputs to high-tech U.S. industries. Moreover, clinching an agreement with China, which will strictly protect U.S. intellectual properties, will be immensely beneficial for the homegrown tech behemoths.
According to Mastercard (NYSE:MA) SpendingPulse, retail sales in the United States from Nov 1 to Dec 24 of 2019 rose 3.4% year over year. This indicates strong spending by Americans, which constitute 70% of the country’s GDP. Moreover, a turnaround in the U.S. housing market and a likely bottoming out of the weakness in the U.S. business spending are the other positives.
Additionally, a dovish Fed which has decided to maintain a stable monetary stance after reducing the benchmark interest rate by 75 basis points in the second half of 2019, influenced the S&P 500’s record rally. Inflation stayed at 1.6%, well below the centrals bank’s targeted rate of 2%.
Our Top Picks
At this stage, it will be prudent to invest in the S&P 500 stocks that popped in 2019 and still have strong upside left. Each of our picks carries a Zacks Rank #1 (Strong Buy). You can see Original post
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