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The Zacks Analyst Blog Highlights: Amazon.com, Apple, NVIDIA, Mosaic and Apache

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For Immediate Release

Chicago, IL – August 24, 2018 – 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 Amazon.com, Inc. (AMZN - Free Report) , Apple Inc. (AAPL - Free Report) , NVIDIA Corporation (NVDA - Free Report) , The Mosaic Company (MOS - Free Report) and Apache Corporation (APA - Free Report) .

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Here are highlights from Thursday’s Analyst Blog:

Wall Street’s Longest Bull Run Shapes Winners and Losers

The U.S. stock market recently recorded its longest rally, largely fueled by the rise of solid consumer discretionary companies and the world’s most powerful tech firms, along with an unmatched era of easy money from low interest rates.

The broader market has garnered $18 trillion in wealth since the S&P 500 bottomed on Mar 9, 2009, creating potential winners. However, not everyone has partaken in this decade-long rally. Let us thus take a look at the potential gainers and losers of the longest-ever bull run.

U.S. Stock Market on Longest Bull Run

The bull run of U.S. stocks became the longest in history at 3,453 days, completed on Aug 22. President Trump tweeted after the market closed that it’s the “longest bull run in the history of the stock market, congratulations America!”

The U.S. stock market’s longest-running upswing survived a decade of financial and political turmoil, thanks to the accommodative monetary policy, strength of the global economy, Barack Obama’s stimulus packages and Trump’s recent tax overhaul policy.

Needless to say, the underlying strength in fundamentals on the back of government outlays, better-than-expected earnings and upbeat consumer confidence are expected to push stocks higher for at least another year, if not longer.

Investing mantras like “sell in May and go away”, by the way, failed to deter the bull run, with the S&P 500 jumping nearly 7% since the beginning of May. The broader index that tracks 500 major public companies in America has traded almost nine and a half years, without tanking 20% or more. During this phase, the S&P 500 has soared 320%.

The 30-stock Dow Jones Industrial Average and the tech-laden Nasdaq Composite, in the meantime, rallied 290% and 520%, respectively.

Factors that Led to a Decade of Rising Prices on Wall Street

In the last decade since the Great recession, the Fed has kept interest rates at ultra-low levels and in the process pumped billions of dollars into the economy through quantitative easing. Such low interest rates helped consumers borrow money and spend in the economy, eventually leading to growth and driving stock prices higher.

Steady global growth also helped the stock market scale northward. Despite the ongoing trade war issues with the United States, Beijing managed to record slower growth avoiding a complete collapse. Eurozone’s sovereign debt crisis isn’t a concern anymore and risks stemming from Italy, Turkey, Venezuela and Argentina are more or less manageable.

Obama’s stimulus worth $1.4 trillion and Trump’s tax cuts fueled corporate profits and supported U.S. stocks. Trump has trimmed corporate tax rate from 35% to 21% from the beginning of this year, arguing that it will help companies to create more jobs.

Top-Performing Sectors in the Historic Bull Market

The recession compelled consumers to cut down on spending, but, in the bull run there has been a significant change in their attitude. Consumers have become more confident and are spending on almost everything, from jeans to handbags to home furnishings, as an uptick in personal income and employment are adding to their incomes. Thus, consumer-focused companies have benefitted, with the consumer discretionary sector leading the performance (read more: Retail Spearheads the Longest-Ever Bull Run: 5 Top Picks).

As recent as the second quarter of this year, disposable personal income increased $167.5 billion, or 4.5%, which followed a gain of $256.7 billion or 7% in the first quarter. At the same time, the current jobless rate dropped to 3.9%. This is the eighth time that the unemployment rate has fallen below the 4% mark since 1970. The unemployment rate is now at a nearly two-decade low (read more: 5 Stocks to Buy on a Historic Job Growth Streak).

Tech firms are also among the most valuable companies in the stock market. They have played a pivotal role in driving the record-setting bull market. They accounted for nearly 26% of the stock market’s value as of today, by far the largest, and up from 16% before the financial crisis.

Tech firms have become an integral part of people’s day to day lives, and the data they collect on users’ social interests and spending habits have become essential. While computer and software makers are having a ball backed by the White House’s initiative to trim tax rates, high-end gaming, emergence of Internet-of-Things and automation are driving demands for chips.

So far in this rally, sectors like financials, Industrials and Real Estate also witnessed a sharp rally.

Stocks That Are Big Winners

The biggest online retailer, Amazon.com, Inc., and the first to surpass a trillion dollar market capitalization, Apple Inc., are among the best performing stocks of the current bull market. While Amazon has gained a whopping 3,000% in this period, the manufacturer of mobile communication and personal computers skyrocketed more than 1,700%.

Amazon’s high-profile membership service has set a new milestone and is now well positioned to capture the next wave of online retail. Amazon’s aggressive expansion, unique market positioning and capability to disrupt new industries also helped its stock scale new highs despite lofty valuations. Amazon has a Zacks Rank #1 (Strong Buy) and the Zacks Consensus Estimate for its current-year earnings has trended 38.8% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Meanwhile, Apple — a Zacks Rank #2 (Buy) company — has seen a monumental run, courtesy of products such as iPhone X, iPhone 8 and 8 plus, Apple watch, Apple TV, Macs and the upcoming HomePod “smart” speaker. Apples’ profit and revenues have been climbing steadily, while it has amassed a mind-boggling hoard of cash in the last six years. The gains have more or less come from the iPhone. The consensus estimate for the Cupertino-based company’s current-year earnings rose 2.5% in the last 60 days.

Chip makers such as NVIDIA Corporation are also considered to have contributed immensely to this bull run. NVIDIA’s shares have jumped 2,886%, so far, in this bull run.

Not All Are Lucky

This bull market has not been kind to all. Shares of The Mosaic Company fell around 27% since Mar 9, 2009. In fact, it is one of the only four companies listed in the S&P 500 that has lost ground in this time span.

Another company that has ended in the red is Apache Corporation, whose shares dropped 18.2%.

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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