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Weekly Jobless Claims Up: What's the Other Side of the Story?
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Wall Street has been abuzz with a slew of events — from Trump’s $1.5 trillion tax cuts, rising consumer sentiment and Jerome Powell’s first rate hike — to U.S.-China trade war, Facebook data breach and not to forget Uber’s driverless car fiasco. Well the story does not end here. Markets encountered an unexpected rise in the number of Americans claiming unemployment benefits.
Per the government data, U.S. jobless benefits rose 3,000 to a seasonally adjusted 229,000 for the week ended Mar 17. The data for the week ended Mar 10 was kept unchanged at 226,000. Nevertheless, analysts shrugged off this marginal increase citing that claims still remain well below the psychological mark of 300,000 for the 159th week, clearly indicating that the labor market continues to remain tight.
Notably, the U.S. economy added a robust 313,000 jobs in February with unemployment rate continuing to hover around at its 17-year low rate of 4.1%. The Fed Chairperson Jerome Powell now expects the unemployment rate to dip from the current level to 3.8% in 2018 and further to 3.6% in 2019. Certainly, robust job scenario and inflationary level paved the way for the sixth rate hike. Powell now envisions economy to grow at a rate of 2.7% in 2018, up from its previous forecast of 2.5%.
What’s the Other Side of Story?
Market pundits are of the opinion that strengthening labor market may lead to gradual wage acceleration, and in turn boost consumer confidence. Per the preliminary data of University of Michigan consumer-sentiment index touched a 14-year high of 102 in March from 99.7 in February.
We expect this positive sentiment to translate into higher consumer spending, which accounts for more than two-thirds of U.S. economic activity. Moreover, individual tax cuts have also paved the way for higher disposable income, which is likely to trigger the demand for discretionary items. National Retail Federation’s projection of an uptick in U.S. retail sales of 3.8-4.4% this year also raises optimism.
We for all reasons Retail-Wholesale sector is likely to steal the show. The sector has advanced 16% in the past six months and comfortably outperformed the S&P 500’s growth of 7%. Moreover, according to the latest Earnings Trends report, the sector is expected to record top and bottom-line growth of 7.3% and 10.7%, respectively, in the first quarter reporting cycle.
You Can’t Ignore Retails Stocks
Here are five stocks from the sector having a favorable combination of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM of A or B.
Macy's, Inc. (M - Free Report) , which sell a range of merchandise, including apparel and accessories, is a prudent choice with a long-term earnings growth rate of 8.5% and a VGM Score of A. Moreover, the stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
You may also consider Abercrombie & Fitch Co. (ANF - Free Report) with a long-term earnings growth rate of 14% and a VGM Score of B. This specialty retailer also carries a Zacks Rank #1.
Investors can count on BJ's Restaurants, Inc. (BJRI - Free Report) , which operates casual dining restaurants. This Zacks Rank #2 stock has a VGM Score of B and a long-term earnings growth rate of 15.3%.
RH (RH - Free Report) , a home furnishing retailer, is a lucrative option. This Zacks Rank #2 stock has a long-term earnings growth rate of 20% and a VGM Score of B.
Burlington Stores, Inc. (BURL - Free Report) , a retailer of branded apparel products, is also a solid bet with a Zacks Rank #2 and a VGM Score of B. The stock has a long-term earnings growth rate of 18.6%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Weekly Jobless Claims Up: What's the Other Side of the Story?
Wall Street has been abuzz with a slew of events — from Trump’s $1.5 trillion tax cuts, rising consumer sentiment and Jerome Powell’s first rate hike — to U.S.-China trade war, Facebook data breach and not to forget Uber’s driverless car fiasco. Well the story does not end here. Markets encountered an unexpected rise in the number of Americans claiming unemployment benefits.
Per the government data, U.S. jobless benefits rose 3,000 to a seasonally adjusted 229,000 for the week ended Mar 17. The data for the week ended Mar 10 was kept unchanged at 226,000. Nevertheless, analysts shrugged off this marginal increase citing that claims still remain well below the psychological mark of 300,000 for the 159th week, clearly indicating that the labor market continues to remain tight.
Notably, the U.S. economy added a robust 313,000 jobs in February with unemployment rate continuing to hover around at its 17-year low rate of 4.1%. The Fed Chairperson Jerome Powell now expects the unemployment rate to dip from the current level to 3.8% in 2018 and further to 3.6% in 2019. Certainly, robust job scenario and inflationary level paved the way for the sixth rate hike. Powell now envisions economy to grow at a rate of 2.7% in 2018, up from its previous forecast of 2.5%.
What’s the Other Side of Story?
Market pundits are of the opinion that strengthening labor market may lead to gradual wage acceleration, and in turn boost consumer confidence. Per the preliminary data of University of Michigan consumer-sentiment index touched a 14-year high of 102 in March from 99.7 in February.
We expect this positive sentiment to translate into higher consumer spending, which accounts for more than two-thirds of U.S. economic activity. Moreover, individual tax cuts have also paved the way for higher disposable income, which is likely to trigger the demand for discretionary items. National Retail Federation’s projection of an uptick in U.S. retail sales of 3.8-4.4% this year also raises optimism.
We for all reasons Retail-Wholesale sector is likely to steal the show. The sector has advanced 16% in the past six months and comfortably outperformed the S&P 500’s growth of 7%. Moreover, according to the latest Earnings Trends report, the sector is expected to record top and bottom-line growth of 7.3% and 10.7%, respectively, in the first quarter reporting cycle.
You Can’t Ignore Retails Stocks
Here are five stocks from the sector having a favorable combination of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM of A or B.
Macy's, Inc. (M - Free Report) , which sell a range of merchandise, including apparel and accessories, is a prudent choice with a long-term earnings growth rate of 8.5% and a VGM Score of A. Moreover, the stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
You may also consider Abercrombie & Fitch Co. (ANF - Free Report) with a long-term earnings growth rate of 14% and a VGM Score of B. This specialty retailer also carries a Zacks Rank #1.
Investors can count on BJ's Restaurants, Inc. (BJRI - Free Report) , which operates casual dining restaurants. This Zacks Rank #2 stock has a VGM Score of B and a long-term earnings growth rate of 15.3%.
RH (RH - Free Report) , a home furnishing retailer, is a lucrative option. This Zacks Rank #2 stock has a long-term earnings growth rate of 20% and a VGM Score of B.
Burlington Stores, Inc. (BURL - Free Report) , a retailer of branded apparel products, is also a solid bet with a Zacks Rank #2 and a VGM Score of B. The stock has a long-term earnings growth rate of 18.6%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>