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Wall Street Buoys Up on Fed's Slow Rate Hike: 5 Growth Picks
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U.S. stocks bounced back to end higher on Feb 2 after the Federal Reserve slowed the rate hike in its latest policy meeting while giving hints that only a few more rate increases are required to fight inflation. While the Dow and the S&P 500 reversed their earlier slide during the trading session to end in the green, the Nasdaq ended at its highest level since mid-September, per the Dow Jones Market Data.
The Fed recently approved a 0.25 percentage points hike in the benchmark interest rate, taking it to a target range of 4.5-4.75%. It’s the highest since October 2007. But the quarter-point rate hike is smaller than the half-point increase in December, which followed four jumbo-sized 75-basis-point increases successively last year.
The Fed’s latest rate hike aligned with market expectations and assured investors that the central bank may not aggressively tighten its monetary policy this year, the way it did last year. The Fed slowed the rate hike as inflation started to show signs of cooling off. Fed Chair Jerome Powell too acknowledged that the disinflationary process has already begun.
The consumer price index increased by 6.5% on an annual basis in December, but that was less than November’s over-over-year increase of 7.1%. It was also the smallest 12-month increase since October 2021, added the U.S. Bureau of Labor Statistics. Similarly, the producer price index increased by 6.2% year over year in December, down from November’s annual jump of 7.3%, added the Labor Department.
Supply-chain disruptions due to demand-supply disparity during pandemic times are now ebbing; hence, price pressures are also decreasing. Additionally, the steady decline in gasoline prices gave households much-needed relief, and the decline in energy prices slowed down the broader increase in wholesale prices in the United States.
Nonetheless, with inflation waning vis-à-vis a less aggressive Fed, the stock market is surely poised to scale upward. After all, aggressive tightening measures like rate hikes impact consumer outlays, raise the cost of borrowing, hamper economic growth, and drag the stock market down. By the way, the stock market is coming off a strong January. Thus, it's prudent for investors to place their bets on growth stocks as of now.
We have, therefore, highlighted five stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and have a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
Axcelis Technologies (ACLS - Free Report) is a leading producer of ion implantation equipment used in the fabrication of semiconductors. ACLS has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 8.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 80.9%.
Arch Resources (ARCH - Free Report) is one of the largest coal producers in the United States. ARCH has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 152.3%.
Casey's General Stores (CASY - Free Report) operates convenience stores under the Casey's and Casey's General Store names in 16 Midwestern states. CASY has a Zacks Rank #2 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 3.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 18.4%.
W.W. Grainger (GWW - Free Report) is a broad-line, business-to-business distributor of maintenance, repair and operating products and services. GWW has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 48.5%.
Halliburton (HAL - Free Report) is one of the largest oilfield service providers in the world. HAL has a Zacks Rank #2 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 4% over the past 60 days. The company’s expected earnings growth rate for the current year is 43.7%.
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Wall Street Buoys Up on Fed's Slow Rate Hike: 5 Growth Picks
U.S. stocks bounced back to end higher on Feb 2 after the Federal Reserve slowed the rate hike in its latest policy meeting while giving hints that only a few more rate increases are required to fight inflation. While the Dow and the S&P 500 reversed their earlier slide during the trading session to end in the green, the Nasdaq ended at its highest level since mid-September, per the Dow Jones Market Data.
The Fed recently approved a 0.25 percentage points hike in the benchmark interest rate, taking it to a target range of 4.5-4.75%. It’s the highest since October 2007. But the quarter-point rate hike is smaller than the half-point increase in December, which followed four jumbo-sized 75-basis-point increases successively last year.
The Fed’s latest rate hike aligned with market expectations and assured investors that the central bank may not aggressively tighten its monetary policy this year, the way it did last year. The Fed slowed the rate hike as inflation started to show signs of cooling off. Fed Chair Jerome Powell too acknowledged that the disinflationary process has already begun.
The consumer price index increased by 6.5% on an annual basis in December, but that was less than November’s over-over-year increase of 7.1%. It was also the smallest 12-month increase since October 2021, added the U.S. Bureau of Labor Statistics. Similarly, the producer price index increased by 6.2% year over year in December, down from November’s annual jump of 7.3%, added the Labor Department.
Supply-chain disruptions due to demand-supply disparity during pandemic times are now ebbing; hence, price pressures are also decreasing. Additionally, the steady decline in gasoline prices gave households much-needed relief, and the decline in energy prices slowed down the broader increase in wholesale prices in the United States.
Nonetheless, with inflation waning vis-à-vis a less aggressive Fed, the stock market is surely poised to scale upward. After all, aggressive tightening measures like rate hikes impact consumer outlays, raise the cost of borrowing, hamper economic growth, and drag the stock market down. By the way, the stock market is coming off a strong January. Thus, it's prudent for investors to place their bets on growth stocks as of now.
We have, therefore, highlighted five stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and have a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
Axcelis Technologies (ACLS - Free Report) is a leading producer of ion implantation equipment used in the fabrication of semiconductors. ACLS has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 8.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 80.9%.
Arch Resources (ARCH - Free Report) is one of the largest coal producers in the United States. ARCH has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 152.3%.
Casey's General Stores (CASY - Free Report) operates convenience stores under the Casey's and Casey's General Store names in 16 Midwestern states. CASY has a Zacks Rank #2 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 3.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 18.4%.
W.W. Grainger (GWW - Free Report) is a broad-line, business-to-business distributor of maintenance, repair and operating products and services. GWW has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 48.5%.
Halliburton (HAL - Free Report) is one of the largest oilfield service providers in the world. HAL has a Zacks Rank #2 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 4% over the past 60 days. The company’s expected earnings growth rate for the current year is 43.7%.