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Mar 9 marked the ninth anniversary of the U.S. stock market’s bull run after the grueling slump following the Great Recession. Since then, stocks have scaled new heights on the latest Republican tax cuts and robust economic growth at home and abroad.
In the meantime, rate hike and inflation fears failed to impede the rally. Investors also breathed a sigh of relief after the recent trade war fears on Trump’s tariffs plan eased. This calls for investing in some rock-solid stocks that have not only outperformed in the current bull market but also have scope to scale higher.
Bull Market Celebrates 9th Birthday
U.S. stocks bottomed on Mar 9, 2009, with the S&P 500 losing more than 50% to hit a low of 676.53. The selloff had provoked President Barack Obama to say that “what you’re now seeing is profit-and-earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it.”
Since then, the benchmark index has more than tripled, marking the second-longest and second-highest bull market run in its history. This record is second to the bull run that stretched through the 1990s.
The Dow also went past the coveted 20,000 mark in late January and then blew past the 21,000 threshold just a month later. The bull market has helped the blue-chip index scale a whopping 14,300 points.
Stocks Outshine Other Investments
During the nine years of the bull market, U.S. stocks handily beat other investments including gold and real estate. U.S. stocks also easily outdid their European counterparts. U.S. large-cap stocks have given a return of around 325% since Mar 9, 2009. This means that the investor who had $100,000 in a fund tracking large-cap stocks, will now have an account balance of about $425,000.
Gold, in the meanwhile, has climbed only 43% from $925 per ounce in March 2009 to the current $1,325, per the World Gold Council. This means an investment of $100,000 in gold is now worth $143,000.
The return on investments in U.S. homes have only risen 19% from March 2009 to February 2018, according to Zillow’s Home Value Index. Thus, the price of an American home has moved up from $175,000 to $208,000 in the last nine years.
Meanwhile, the Europe Stoxx 600, a broad index of large European stocks, jumped 135% during the same time frame. Such gains boosted a $100,000 investment to $235,000, less than half of U.S. large-cap stocks.
Catalysts Behind the Bull Market
The bull run was no fluke, since the current stock prices are well supported by the Trump-induced rally. Trump’s polices including tax cuts, repealing regulations and increased infrastructure outlays restored expectations of a pro-growth agenda that helped the broader market push further into record territory.
The new tax laws give companies a massive tax break as they will be paying between 8% and 15.5% instead of the earlier 35% to bring back money from overseas. This means around $1.2 trillion in foreign profits that the S&P 500 companies are sitting on will be returned. This in turn can be used to create jobs and reward shareholders — something the Trump administration has been aiming for since the election campaigns (read more: GOP Passes Landmark Tax Bill: Best & Worst for Stocks).
Trump’s economy also started 2017 on a stellar note. The U.S. economy expanded at a seasonally adjusted annual rate of 2.3% last year, marking the best growth in two years. Also, Americans are getting fatter paychecks, with wages growing at the quickest pace since the end of the last decade (read more: Wages See Fastest Growth Since 2009: Top 5 Gainers).
But, there is another major factor behind the strong American growth. It’s the global economic growth, with every major country from China to Europe and Latin America to Japan expanding at a healthy pace. According to the International Monetary Fund, the global economy expanded at rate of 3.7% last year, the fastest since 2010.
A healthier global economy, in turn, lifted corporate profits. In fact, for full-year 2017, total S&P 500 index earnings are expected to be up 7.1% on 5.9% higher revenues, way higher than the 0.7% earnings growth on 2.2% higher revenues recorded in 2016 (read more: A Very Positive Earnings Picture).
Bull Market to Stay: 5 Winners
The tax overhaul policy, solid global economic growth and encouraging earnings picture have certainly helped dismiss the fear that the Federal Reserve embarking on a quicker route to interest rate hikes might derail the record bull run. Odds of a trade war, in the meantime, ebbed after Trump exempted Canada and Mexico from steel and aluminum tariffs and allowed other countries to negotiate exclusions.
Ryan Detrick, senior market strategist at LPL Financial, further said that since 1950, if the S&P 500 increases 5% or more in January, the full-year returns are always positive. Needless to say, the benchmark index nudged up 5.6% in January.
Banking on such positives, we have selected five solid stocks that have outperformed in the current bull market and have the scope to gain further. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Builders FirstSource, Inc. (BLDR - Free Report) manufactures and supplies building materials in the United States. The company has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings moved up 16.2% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 45.5% and 40.9%, respectively. The company has yielded a huge return of 1541.1% in the Mar 9, 2009-Mar 9, 2018 period.
Paycom Software, Inc. (PAYC - Free Report) provides cloud-based human capital management (HCM) software service for small to mid-sized companies in the United States. The company has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings surged 61.8% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 91.5% and 89.2%, respectively. The company has given a solid return of 572.9% in the Mar 9, 2009-Mar 9, 2018 period.
Salesforce.com, inc. (CRM - Free Report) develops enterprise cloud computing solutions with a focus on customer relationship management. The company has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings moved up 18.7% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 57.1% and 50.4%, respectively. The company has given a stellar return of 1705.1% in the last nine-year period. You can see the complete list of today’s Zacks #1 Rank stocks here.
Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. The company has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings advanced 9.3% in the last 60 days. The stock’s expected growth rate for the current quarter and years are 13.8% and 16.2%, respectively. The company has given a superb return of 376.9% in the nine years.
Central Garden & Pet Company (CENT - Free Report) produces and distributes products for the lawn and garden, and pet supplies markets in the United States. The company has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings rose 13.9% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 26.9% and 26%, respectively. The company has yielded a promising return of 454.4% in the Mar 9, 2009-Mar 9, 2018 period.
Don’t Even Think About Buying Bitcoin Until You Read This
The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.
Zacks has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Image: Bigstock
5 Top Stocks to Buy as Bull Market Turns Nine
Mar 9 marked the ninth anniversary of the U.S. stock market’s bull run after the grueling slump following the Great Recession. Since then, stocks have scaled new heights on the latest Republican tax cuts and robust economic growth at home and abroad.
In the meantime, rate hike and inflation fears failed to impede the rally. Investors also breathed a sigh of relief after the recent trade war fears on Trump’s tariffs plan eased. This calls for investing in some rock-solid stocks that have not only outperformed in the current bull market but also have scope to scale higher.
Bull Market Celebrates 9th Birthday
U.S. stocks bottomed on Mar 9, 2009, with the S&P 500 losing more than 50% to hit a low of 676.53. The selloff had provoked President Barack Obama to say that “what you’re now seeing is profit-and-earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it.”
Since then, the benchmark index has more than tripled, marking the second-longest and second-highest bull market run in its history. This record is second to the bull run that stretched through the 1990s.
The Dow also went past the coveted 20,000 mark in late January and then blew past the 21,000 threshold just a month later. The bull market has helped the blue-chip index scale a whopping 14,300 points.
Stocks Outshine Other Investments
During the nine years of the bull market, U.S. stocks handily beat other investments including gold and real estate. U.S. stocks also easily outdid their European counterparts. U.S. large-cap stocks have given a return of around 325% since Mar 9, 2009. This means that the investor who had $100,000 in a fund tracking large-cap stocks, will now have an account balance of about $425,000.
Gold, in the meanwhile, has climbed only 43% from $925 per ounce in March 2009 to the current $1,325, per the World Gold Council. This means an investment of $100,000 in gold is now worth $143,000.
The return on investments in U.S. homes have only risen 19% from March 2009 to February 2018, according to Zillow’s Home Value Index. Thus, the price of an American home has moved up from $175,000 to $208,000 in the last nine years.
Meanwhile, the Europe Stoxx 600, a broad index of large European stocks, jumped 135% during the same time frame. Such gains boosted a $100,000 investment to $235,000, less than half of U.S. large-cap stocks.
Catalysts Behind the Bull Market
The bull run was no fluke, since the current stock prices are well supported by the Trump-induced rally. Trump’s polices including tax cuts, repealing regulations and increased infrastructure outlays restored expectations of a pro-growth agenda that helped the broader market push further into record territory.
The new tax laws give companies a massive tax break as they will be paying between 8% and 15.5% instead of the earlier 35% to bring back money from overseas. This means around $1.2 trillion in foreign profits that the S&P 500 companies are sitting on will be returned. This in turn can be used to create jobs and reward shareholders — something the Trump administration has been aiming for since the election campaigns (read more: GOP Passes Landmark Tax Bill: Best & Worst for Stocks).
Trump’s economy also started 2017 on a stellar note. The U.S. economy expanded at a seasonally adjusted annual rate of 2.3% last year, marking the best growth in two years. Also, Americans are getting fatter paychecks, with wages growing at the quickest pace since the end of the last decade (read more: Wages See Fastest Growth Since 2009: Top 5 Gainers).
But, there is another major factor behind the strong American growth. It’s the global economic growth, with every major country from China to Europe and Latin America to Japan expanding at a healthy pace. According to the International Monetary Fund, the global economy expanded at rate of 3.7% last year, the fastest since 2010.
A healthier global economy, in turn, lifted corporate profits. In fact, for full-year 2017, total S&P 500 index earnings are expected to be up 7.1% on 5.9% higher revenues, way higher than the 0.7% earnings growth on 2.2% higher revenues recorded in 2016 (read more: A Very Positive Earnings Picture).
Bull Market to Stay: 5 Winners
The tax overhaul policy, solid global economic growth and encouraging earnings picture have certainly helped dismiss the fear that the Federal Reserve embarking on a quicker route to interest rate hikes might derail the record bull run. Odds of a trade war, in the meantime, ebbed after Trump exempted Canada and Mexico from steel and aluminum tariffs and allowed other countries to negotiate exclusions.
Ryan Detrick, senior market strategist at LPL Financial, further said that since 1950, if the S&P 500 increases 5% or more in January, the full-year returns are always positive. Needless to say, the benchmark index nudged up 5.6% in January.
Banking on such positives, we have selected five solid stocks that have outperformed in the current bull market and have the scope to gain further. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Builders FirstSource, Inc. (BLDR - Free Report) manufactures and supplies building materials in the United States. The company has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings moved up 16.2% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 45.5% and 40.9%, respectively. The company has yielded a huge return of 1541.1% in the Mar 9, 2009-Mar 9, 2018 period.
Paycom Software, Inc. (PAYC - Free Report) provides cloud-based human capital management (HCM) software service for small to mid-sized companies in the United States. The company has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings surged 61.8% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 91.5% and 89.2%, respectively. The company has given a solid return of 572.9% in the Mar 9, 2009-Mar 9, 2018 period.
Salesforce.com, inc. (CRM - Free Report) develops enterprise cloud computing solutions with a focus on customer relationship management. The company has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings moved up 18.7% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 57.1% and 50.4%, respectively. The company has given a stellar return of 1705.1% in the last nine-year period. You can see the complete list of today’s Zacks #1 Rank stocks here.
Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. The company has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings advanced 9.3% in the last 60 days. The stock’s expected growth rate for the current quarter and years are 13.8% and 16.2%, respectively. The company has given a superb return of 376.9% in the nine years.
Central Garden & Pet Company (CENT - Free Report) produces and distributes products for the lawn and garden, and pet supplies markets in the United States. The company has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings rose 13.9% in the last 60 days. The stock’s expected growth rate for the current quarter and year are 26.9% and 26%, respectively. The company has yielded a promising return of 454.4% in the Mar 9, 2009-Mar 9, 2018 period.
Don’t Even Think About Buying Bitcoin Until You Read This
The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.
Zacks has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 4 crypto-related stocks now >>