Wall Street Bull Run Continues In 2019: 5 Top Growth Picks
Zacks Investment Research | Feb 19, 2019 08:09PM ET
Wall Street has been on a bull run since the beginning of 2019. After rebounding in January, U.S. stock markets consolidated in February. The bull-run can be attributed to positive developments on the trade war front, temporary deal between the Republicans and Democrats to avert government shutdown again and the Fed’s dovish monetary stance.
Consequently, it will be a prudent move to invest in stocks with a favorable Zacks Rank and strong growth potential.
Wall Street Bull Run Continues
After tumultuous 2018, Wall Street has been recovering in 2019. Year to date, the three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – are up 11%, 10.9% and 12.8%, respectively. Notably, both the Dow and Nasdaq Composite finished in the green in the preceding eight weeks. Meanwhile, the S&P 500 ended in the green in seven of the last eight weeks.
On Feb 12, the S&P 500 finished above its 200-days moving average for the first time since Dec 4, 2018. This was a key technical barrier indicating upside potential of the benchmark index in the near term. On Feb 15, Nasdaq Composite exited its longest bear market by one measure since 1991. This represents a significant turnaround of the tech-heavy index from its collapse in the fourth quarter of 2018.
Positive Development on Trade War Front
The latest round of trade negotiations between the United States and China ended on Feb 15. However, a fresh round of talks is slated to begin on Feb 21 in Washington. Negotiators from both countries remained undecided on a few key issues.
Meanwhile, on Feb 19, President Donald Trump said that he would consider extending the deadline of the current trade truce period which will come to an end on Mar 1. The decision comes as a result of smooth progress on the negotiation front.
Temporary Deal Helps Avert Government Shutdown
On Feb 12, Republican as well Democrat Congressional leaders reached a joint agreement to allow $1.4 billion funding for fencing 55 miles along the United States - Mexico border. The move prevented another government shutdown. The amount was way less than $5.7 billion demanded by President Trump for the construction of a 215-mile-long concrete fence across the border.
Although President Trump declared a national emergency ton account of his demands, he also said “I don’t think you’re going to see a shutdown.” Moreover, 16 states have filed a federal lawsuit on Feb 18, against national emergency.
Fed to Remain Patient Regarding Monetary Policy
On Jan 30, the Federal Reserve decided to keep the federal funds target rate unchanged in the range of 2.25 - 2.50%. Fed Chairman Jerome Powell stated that the central bank will be patient while taking a call on future rate hike.
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Instead of following a predetermined path, Fed will consider all economic parameters and market conditions carefully before reaching a decision. The central bank’s bond portfolio reduction strategy will also consider macro-economic metrics and trade related disruptions, and is not on “autopilot”, as suggested by the Fed Chair in December.
Our Top Picks
At this stage, investment in stocks with strong growth potential will be lucrative. Our selection is backed by a good Zacks Investment Research
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