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Growth Stays in Favor: Zacks June Market Strategy

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The following is an excerpt from Zacks Chief Strategist John Blank’s full Jun Market Strategy report To access the full PDF, click here.

Want to know the YTD returns to May 31st, 2023?

  • The narrow DJIA index was down -0.32%
  • The broader S&P 500 index was up +9.53%, and
  • The tech-heavy Nasdaq was up +24.37%

Entering June, trader focus is centered on Info Tech growth stocks, and the “AI” pump.

I. U.S. Markets Recap

A table below show U.S. index returns, sorted by size of YTD 2023 return to May 16th.

First, Growth fully trumps Value across Large, Mid, and Small Cap U.S. index styles.

Second, S&P 500 Info Tech and Consumer Discretionary sectors — where the mega-cap tech stocks reside — has been the sole source of the large-cap growth index rise.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Investment Research
Image Source: Zacks Investment Research


II. Zacks June Sector/Industry/Company Telescope

The consumer remains the core earnings driver, according to reporting S&P 500 companies. Consumer Discretionary and Consumer Staples stayed at Very Attractive.

Industrials stayed on as a Very Attractive sector too. Lots of hot industries are showing.

Utilities rose to Very Attractive, showing untypical cyclical placement. Utilities-Telephone looks the best.

The Health Care sector fell back to Market Weight. Materials and the Energy sector remain grouped at Market Weight.

Financials fell all the way to Very Unattractive. There is loads of concern about this sector now. Recession worry, office REITs, investment funds, all got downgraded.

(1) Consumer Discretionary stayed Very Attractive. Apparel, Autos/Tires/Trucks, Home Furnishings, and Leisure are the top areas.

Zacks #1 Rank (STRONG BUY): Royal Caribbean Cruises (RCL - Free Report)

(2) Consumer Staples stayed Very Attractive from Market Weight. Food/Drug Retail, Food, and Soaps & Cosmetics are best.

Zacks #1 Rank (STRONG BUY): ConAgra Brands (CAG - Free Report) )

(3) Industrials
stayed Very Attractive. Construction-Building Services, Metal Fabricating, Pollution Control, Machinery, Industrial Products-Services, and Machinery-Electrical are tops. Lots to pick from here…

Zacks #1 Rank (STRONG BUY): Aptar Group (ATR - Free Report)

(4) Materials rise to Very Attractive from Attractive. Building Products was the best.

(5) Utilities rose to Very Attractive from Unattractive. Utilities-Telephone looks the best.

(6) Info Tech stayed Attractive. Semis rose notably to Very Attractive!

(7) Health Care fell to Market Weight. Medical Products led.

(8) Energy stays at Market Weight. Oil Pipelines, Oil Misc. and Drillers look best.

(9) Communications Services stays at Market Weight.

(10) Financials fell to Very Unattractive from Market Weight. Finance was the best you could do here. Lots of downgrades.

III. Conclusion

Bulls, the U.S. consumer is still very much with you.

Bears? Keep an eye on growing concerns for Financial Sector groups.

Enjoy the rest of the JUNE 2023 Zacks market strategy report.

Warm Regards,

John Blank
Zacks Chief Equity Strategist and Economist

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Royal Caribbean Cruises Ltd. (RCL) - free report >>

Conagra Brands (CAG) - free report >>

AptarGroup, Inc. (ATR) - free report >>

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