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

The Zacks Computer & Technology sector? It is leading the way on Q3 earnings growth.

This month, we take a deeper dive — into that all-important Q3 earnings growth area.

First up is critical Zacks Share Price, EPS Consensus, and EPS Surprise charts for selected stocks in the Zacks Computer & Technology sector.

See the Computer – Office Equipment set of four large-cap stocks, then Computer – Software Services set of four:
 

Image Source: Zacks Investment Research

Second, the Electronics – Semiconductors set of four large cap stocks, then the Electronics set of four:
 

Image Source: Zacks Investment Research

What is an investor in stocks, for the long run, looking for?

Smooth annual EPS earnings estimates climbing up, showing the company’s growth strategy. Then, serial EPS surprises, quarter after quarter.

Finally, the share price is recognizing both the strong annual EPS estimates, and the quarterly serial surprise.

You can also gauge “fair value’ by seeing if the share price is over or under the 2025 and 2026 annual EPS lines.
 

The Zacks October 2024 Sector/Industry/Company Telescope

The Sept. 30th, 2024 Zacks Industry Ranks delivered a stable cyclical set-up, again.

OCT sector/industry ranking kept two Very Attractive sectors: Industrials and Consumer Staples.

The Consumer Staples sector got a big upgrade this month, rising all the way from Very Unattractive to tops.

OCT ranking showed stock-investors four Attractive sectors: Utilities, Info Tech, Financials, Communication Services.

At Market Weight, we have three sectors: Health Care, Consumer Discretionary and Materials.

Energy fell to the back, now at Very Unattractive.

(1) Industrials stayed Very Attractive. Machinery, Aerospace & Defense, and Construction – Building Services stood out at the strongest industries.

Zacks #1 Rank (STRONG BUY): FTAI Aviation (FTAI Quick QuoteFTAI - Free Report)

(2) Consumer Staples rose all the way to Very Attractive from Very Unattractive. Tobacco and Soaps & Cosmetics stay the strongest groups.

Zacks #1 Rank (STRONG BUY): Unilever (UL Quick QuoteUL - Free Report)

(3) Utilities fell to Attractive from Very Attractive. Utility-Water Supply looked best.

Zacks #1 Rank (STRONG BUY): Clean Energy Fuels (CLNE Quick QuoteCLNE - Free Report)

(4) Info Tech stayed at Attractive. Misc. Tech and Computer Office Equipment led.

(5) Financials stayed Attractive. Insurance looked best.

(6) Communications Services stayed Attractive. Telco Services was the best.

(7) Health Care fell to Market Weight from Attractive. Drugs looked best.

(8) Consumer Discretionary stayed at Market Weight. Publishing and Home Appliance-Furnishing looked the best, once again.

(9) Materials stayed Market Weight. Containers & Glass looked strong, again.

(10) Energy fell to Very Unattractive from Unattractive. Coal looked the best, again.
 

Conclusion

For stock market bulls, we have a dominant S&P500 sector in hand.

Note this below—

5 of 16 Zacks sectors show relatively strong Q3-24 earnings expectations:

    •    Technology (+10.6%)
    •    Medical (+8.3%)
    •    Aerospace (+7.1%) 
    •    Business Services (+7.1%)
    •    Finance (+4.8%)

Yes!

In Q3, the Zacks Technology stock market sector leads the way.

Enjoy the rest of my OCT 2024 Zacks Market Strategy report.

Warm Regards,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist