The Zacks Analyst Blog Highlights: HEICO, Group 1 Automotive, Rent-A-Center, Repligen And Strategic Education
Zacks Investment Research | Jun 03, 2019 09:58PM ET
For Immediate Release
Chicago, IL – June 4, 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: HEICO Corp. (NYSE:HEI) , Group 1 Automotive Inc. (NYSE:GPI) , Rent-A-Center Inc. (NASDAQ:RCII) , Repligen Corp. (NASDAQ:RGEN) and Strategic Education Inc. (NASDAQ:STRA) .
Here are highlights from Monday’s Analyst Blog:
U.S. Heading for Largest Economic Expansion: 5 Top Stocks
Finally, May's market mayhem is over. June 2019 promises to bring along fortunes as the United States is on the verge of completing the longest economic expansion. According to the National Bureau of Economic Research, the ongoing expansion started back in June 2009. The previous record of longest economic expansion was from March 1991 to March 2001.
Fundamentals of the U.S. economy remain strong with no nearby sign of recession. Despite the stock market rout in May, a closer look at the U.S. economy has a different story to tell, with enough reasons for further rally on Wall Street.
Stock Market Meltdown Likely Temporary
President Donald Trump’s tariff wars against China and Mexico brought back volatility in Wall Street, which otherwise sailing through impressively in the first four months on 2019. In May, the three major stock indexes -- the Dow, S&P 500 and Nasdaq Composite -- plunged 6.7%, 6.6% and 7.9%.
However, year-to-date, these indexes are still in the positive territory with gains of 6.4%, 9.8% and 12.3%, respectively. Notably, per Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, a pullback of 5% or more in a month on the S&P 500 Index happened in 65 of the last 70 years. So, a sudden shock last month may well be the much-needed correction in stock markets.
U.S. Economy Remains Strong
For May 2019, the Conference Board's measure of consumer confidence index stands at 134.1 compared with 129.2 in April. May’s reading is near the 18-year high recorded in November 2018. This indicates that U.S. consumers are highly confident about future growth despite trade concerns.
On May 3, the Department of Labor reported that the U.S. economy added 263,000 jobs in April. Year to date, job gains are impressive at 205,000 on an average per month. Unemployment fell to 3.6% compared with the consensus estimate of 3.8%. This marks the lowest level of unemployment since December 1969.
The Philadelphia Fed manufacturing index came in at 16.6 in May, a massive gain from the reading of 8.5 in April. The index was the highest in four months in May. Notably, any reading above zero indicates improving conditions. The employment index grew to 18.2, the highest in five months. The prices index was at 17.5, the lowest in 17 months.
Fed Maintains Dovish Stance
The Federal Reserve has decided to keep the federal funds target rate unchanged in the range of 2.25-2.50% at least for the time being. The central bank also said that it will not downsize its $4 trillion balance sheet this year. Per the Fed, although U.S. economy is in solid footing, trade-related concerns may result in global economic slowdown which will reduce the growth rate of the U.S. economy.
Moreover, core PCE inflation index – Fed’s favorite inflation gauge – increased 1.6% in April, well below the central bank’s target rate of 2%. Muted inflation and the likelihood of a reduction of U.S. economic growth may compel Fed to reduce interest rate, much to the delight of President Trump. The Trump administration is constantly blaming the central bank for its aggressive monetary stance as the major hindrance of economic growth.
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At this stage, it will be prudent to invest in stock with strong growth potential and a favorable Zacks Rank. We have narrowed down our search to five such stocks with a Zacks Investment Research
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