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Economy Trumps Sequester High Noon

Kevin Cook here again for Steve...

What if Congress had a gunfight at high noon and investors didn't care? That's what happened this week. While the spending cuts and budget battles certainly matter, Wall Street has become immune to the political noise. In the big picture, we want Washington to care about deficits and to function.

And as long as those are happening to some degree, institutional investors can get back to their primary vocation: allocating capital and picking stocks in a bull market. Because we'd likely also prefer some of the companies we pick to function with less dependence on government spending programs.

We want an expanding economy and consequent earnings growth to be the foundation of our investment thesis. For that, Thursday gave us a strong Chicago PMI confidence boost, a welcome surprise dip in jobless claims back below 350k, and a slight upward revision to Q4's "Cliff dive" GDP.

Bottom line: Investors are looking past DC, and the last GDP dive, to coming quarters of growth in the economy. With the durability of this recovery now benefiting from the resurgence in housing, today we can probably ignore the White House showdown and focus on the manufacturing and construction data.

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Kevin Cook

Senior Stock Strategist

Zacks Investment Research

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Kevin's About to Make A Trade

Some pros have a "knack" for profiting whether the market is bullish, bearish, sideways, or volatile. They even make money when they guess wrong about the direction of a stock.

Even more remarkably, they accomplish this while facing less risk than ordinary investors. Zacks master strategist, Kevin Matras reveals how they do it . . .

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Bull & Bear of the Day

Zacks Rank #1 Strong Buy

Air Lease (AL)

Earnings taking off as this stock soars higher.


Zacks Rank #5 Strong Sell

Hawaiian Holdings (HA)

The turbulence at HA is no joke.

Stock Picking Strategies

The Right Way to Find Growth and Value Stocks  ››

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Ahead of Wall St  ››

Funds Commentary

Top 5 Zacks #1 Ranked Small-Cap Mutual Funds  ››

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Treasury Bond ETFs: Still Room to Run?  ››

Options Strategies

How to Profit from Option Volatility  ››

Video Reports

Best ETFs of February

Eric Dutram, ETF Strategist, discusses the big winners from February in the ETF world.

Market Eyes a Slew of News This Week

Zacks experts provide their read on the potential market moving news in focus.

Roundtable Top Picks for the Week of Feb. 25th

Ideas for Lodging, Reits and Retail. Stocks covered include Wyndham Worldwide (WYN), Omega Healthcare Investors (OHI) and Herbalife (HLF).


What's Today's Top Rated Mutual Fund?

Use the Zacks Mutual Fund Rank, a quantitative ratings system designed to help you find the best funds to beat the market. See which ones to buy, which to sell and track your favorite mutual fund family.

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