We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Strong Economic Reports: Bullish For The Economy And Stocks
The markets ended mixed yesterday as they continue to consolidate gains amid recent volatility, and build a new base.
Once again, the financial media continues to point to an incremental rise in rates as hurting the market.
Don't listen to that nonsense.
A measured, well telegraphed rise in rates is good for the economy. True, too much could stifle it. But with the Fed repeatedly talking about 3 rate hikes this year (no surprise), that would only put the Fed Funds rate 0.75% higher at between 2.00 to 2.25%. That's not a market killing rate. It would take years (literally years) of a relentless series of rate hikes to derail the economy. And the economy would have to be on the verge of running out of steam to make that happen.
Instead, the economy is gaining momentum, with GDP last year more than doubling the previous pace, this year expected to be even better, and 2019 even better than that, given the historic corporate tax cuts, which will usher in years of new prosperity, and the individual tax cuts which have only just begun to be felt by consumers.
There will no doubt be more volatility as we head into the next Fed meeting in March where rates are expected to increase by 0.25%. But any pullback in the interim should be looked at as an opportunity to pick up your favorite stocks on sale.
Remember, a pullback in stocks is a bargain if you believe the market is ultimately going higher. And I cannot come up with one credible scenario at this time for why it won't.
In other news, yesterday's Weekly Jobless Claims came in better than expected shedding -7,000 new claims at 222,000 vs. views for 230K.
The Kansas City Manufacturing Index posted "very solid growth" this month at 17.0, beating last month's 16.0 and expectations for 16.5.
And the Leading indicators report also "points to robust economic growth ahead" with a m/m print of 1.0% growth vs. the previous month's 0.6% and views for the same.
Those reports are three of MANY that continue to underscore the strength of this economy and this historic bull market.
See you tomorrow,
Kevin Matras
Executive Vice President, Zacks Investment Research
If you've been in the market for any length of time, you've probably seen a perfectly good stock nosedive in price for no apparent reason. You may be looking at the aftermath of computer-driven high-frequency trading activity. Their favorite tactic is to trigger panic selling on a strong company. They buy as it bottoms and collect big gains as price returns to a normal level.
Zacks Counterstrike portfolio scans the market for these Manipulated Price Drops – and turns them into profit opportunities for human investors.
Right now, this strategy has detected a selection of stocks that appear to be on the verge of their comebacks. Quick double-digit gains could be seen in as little as 3 weeks. Don't delay. Access to these stocks closes midnight Sunday, February 25.
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.