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Thanksgiving Brings Strong Seasonal Market Trends: 5 Picks

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Wall Street has historically performed well from the beginning of the Thanksgiving week through the end of the year. In fact, during the said period, the broader S&P 500 registered positive returns 19 times, or 76%, since 1995, as quoted in a CNBC article.

And this time around it’s no different! We are already into the Thanksgiving week and the S&P 500 jumped 1.6% to 3,635.41 on Nov 24, notching a record close. The S&P 500 is now up 11.2% this month, and if the index continues its stupendous performance, it will register its best monthly gain since April.

The 30-stock Dow, in the meantime, topped the 30,000 mark for the first time yesterday. Banking on Tuesday’s gains, the blue-chip index is up more than 13% so far this month. So, what’s behind such record rallies? Also, what makes us believe that the stock market will continue to do well for the rest of the year?

Primarily, political unrest that plagued investors before the election is largely gone. Market pundits also cheered news that former Fed Chair Janet Yellen will be the next Treasury Secretary. Yellen, during her tenure as the Fed Chair, has always been market friendly. She had kept interest rates at a low level that boosted the economy vis-à-vis the stock market. She is also widely expected to push for additional stimulus measures to reinvigorate the U.S. economy, which is currently grappling with the coronavirus pandemic.

Yellen is also known to have handled the financial turmoil pretty well. For instance, when she was part of the Fed, the central bank had approved a slew of unusual methods like quantitative easing amid the financial crisis, which gave a new lease of life to the U.S. economy. Many experts now believe that she will adopt a similar self-assured stance in addressing the devastating impact of the coronavirus pandemic on the economy.

Talking about the deadly virus, promising news on the vaccine front and subsequently its positive impact on the U.S. economy played a crucial role in lifting the stock market. No doubt, coronavirus cases continue to rise in most parts of the country. But it’s also true that some of the drug manufacturers are on the threshold of coming up with a coronavirus vaccine.

Such a positive development did help economically-sensitive beaten-down cyclical stocks, in particular, move north yesterday. These stocks are mostly perceived to be value stocks that certainly boast of solid underlying fundamentals. Such stocks range from consumer discretionary players to oil and gas exploration companies to industrials to financials (read more: Cyclical Stocks Pop on Vaccine Progress: 5 Solid Buys).

So, in the race to the coronavirus vaccine, who are the front-runners? AstraZeneca PLC’s (AZN - Free Report) interim analysis showed that its coronavirus vaccine candidate had an average 70% efficacy. Meanwhile, late-stage analysis of Moderna, Inc (MRNA - Free Report) and Pfizer Inc.’s (PFE - Free Report) vaccine candidates turned out to be around 95% effective. It’s worth pointing out that both Moderna and Pfizer’s vaccine candidates used mRNA technology (read more: 3 Stocks to Win Big as Race for Coronavirus Vaccine Heats Up).

Stay Bullish on Strong Seasonal Trends: 5 Top Picks

Given the array of positive factors, the stock market is set to do well in the near term. Traditionally, the stock market tends to do well from the Thanksgiving week till the end of the year. Thus, it’s imperative to cash in on this broadly upward trend by investing in growth-oriented stocks. Thanks to our style score system, we have been able to identify five growth stocks. Our research shows that stocks with a Growth Score of A or B when combined a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the growth investing space.

Mvb Financial Corp. (MVBF - Free Report) provides banking and mortgage products and services to individuals and corporate clients. The company currently has a Zacks Rank 2 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has risen 13.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 9.3%.

General Motors Company (GM - Free Report) is one of the world’s largest automakers that leads the U.S. market share with around 17% of the industry’s total sales in 2019. The company currently has a Zacks Rank 1 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 83.2% over the past 60 days. The company’s expected earnings growth rate for the current quarter is more than 100%.

Franklin Electric Co., Inc. (FELE - Free Report) is a global leader in the production and marketing of systems and components for the movement of water and automotive fuels. The company currently has a Zacks Rank 2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has climbed almost 14% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 18.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vista Outdoor Inc. (VSTO - Free Report) is an American manufacturer and seller of outdoor sports and recreation products. The company currently has a Zacks Rank 1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved 37.1% up over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.

Malibu Boats, Inc. (MBUU - Free Report) operates as a designer, manufacturer and marketer of sport boats, primarily in the United States. The company currently has a Zacks Rank 2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has risen 10.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 46.8%.

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