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5 Top S&P 500 Stocks to Buy as Index Enters Bull Market
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The S&P 500 Index formally exited the bear-market territory last week. The broader index posted its fourth successive weekly gain. It’s the index’s longest winning run since August 2022. On Jun 8, the S&P 500 finished 20% above 2022’s trough in October. This means that the index remained in the bear-market territory for the longest period since May 15, 1948.
Investors, undoubtedly, cheered the index’s new milestone since a rise of 20% from the recent lows indicated the beginning of a bull market. Moreover, the index has more room to run as it is still 10.5% off from its record closing high. At the same time, historically, whenever the S&P 500 Index exited the bear market, it had, on average, given a positive return of 9.3% over the subsequent one-year period, per Dow Jones Market Data, citing a MarketWatch article.
So, what led the S&P 500 to notch weekly gains and exit the bear-market territory? Market pundits for quite a while were concerned about how stubbornly high inflation, and consequently, an aggressive Federal Reserve would ravage economic growth, and derail the stock market’s growth trajectory. After all, the Fed’s initiative to hike interest rates to bring down inflation impacted consumer outlays and increased borrowing costs.
However, with the rise in consumer prices easing year over year in April, it’s widely expected that the Fed may pause interest rate hikes soon. In reality, the Fed funds futures showed that there is a 71.2% chance that the central bank might declare a likely pause in further interest rate increases, in its June policy meeting, per CME FedWatch Tool.
While a Fed rate hike pause bodes well for the economy, a resilient labor market has restored confidence that the economy is still in good shape, helping stocks climb northward. The U.S. economy saw an addition of more-than-anticipated new jobs in May, while job additions were also revised upward for the month of March and April. Hiring was broad-based, while the jobless rate continues to hover below the 4%-mark, indicating a buoyant labor market (read more: 5 Stocks to Gain From Stunning Jobs Growth in May).
Therefore, given these recent strengths, it’s judicious for investors to invest in sound stocks listed on the S&P 500 Index that are positioned to scale upward along with the broader index. Thus, we have highlighted five such stocks that have performed fairly well this year.
These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth, and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ford Motor (F - Free Report) is one of the leading automakers in the world. Ford Motor has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 16% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 6.2%. Its shares have already gained 18.1% so far this year.
PulteGroup (PHM - Free Report) engages in homebuilding and financial services businesses, primarily in the United States. PulteGroup has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 22.7% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 16%. Its shares have already gained 58.1% year to date.
Adobe (ADBE - Free Report) is one of the largest software companies in the world. Adobe has a Zacks Rank #2 and a VGM 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 next five-year period is 13.4%. Its shares have already gained 34.9% so far this year.
Marriott International (MAR - Free Report) is a leading worldwide hospitality company. Marriott International has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 8.3% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 15.5%. Its shares have already gained 20.2% year to date.
Lennar (LEN - Free Report) is engaged in homebuilding and financial services in the United States. Lennar has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 0.7% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 6%. Its shares have already gained 26.2% so far this year.
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5 Top S&P 500 Stocks to Buy as Index Enters Bull Market
The S&P 500 Index formally exited the bear-market territory last week. The broader index posted its fourth successive weekly gain. It’s the index’s longest winning run since August 2022. On Jun 8, the S&P 500 finished 20% above 2022’s trough in October. This means that the index remained in the bear-market territory for the longest period since May 15, 1948.
Investors, undoubtedly, cheered the index’s new milestone since a rise of 20% from the recent lows indicated the beginning of a bull market. Moreover, the index has more room to run as it is still 10.5% off from its record closing high. At the same time, historically, whenever the S&P 500 Index exited the bear market, it had, on average, given a positive return of 9.3% over the subsequent one-year period, per Dow Jones Market Data, citing a MarketWatch article.
So, what led the S&P 500 to notch weekly gains and exit the bear-market territory? Market pundits for quite a while were concerned about how stubbornly high inflation, and consequently, an aggressive Federal Reserve would ravage economic growth, and derail the stock market’s growth trajectory. After all, the Fed’s initiative to hike interest rates to bring down inflation impacted consumer outlays and increased borrowing costs.
However, with the rise in consumer prices easing year over year in April, it’s widely expected that the Fed may pause interest rate hikes soon. In reality, the Fed funds futures showed that there is a 71.2% chance that the central bank might declare a likely pause in further interest rate increases, in its June policy meeting, per CME FedWatch Tool.
While a Fed rate hike pause bodes well for the economy, a resilient labor market has restored confidence that the economy is still in good shape, helping stocks climb northward. The U.S. economy saw an addition of more-than-anticipated new jobs in May, while job additions were also revised upward for the month of March and April. Hiring was broad-based, while the jobless rate continues to hover below the 4%-mark, indicating a buoyant labor market (read more: 5 Stocks to Gain From Stunning Jobs Growth in May).
Therefore, given these recent strengths, it’s judicious for investors to invest in sound stocks listed on the S&P 500 Index that are positioned to scale upward along with the broader index. Thus, we have highlighted five such stocks that have performed fairly well this year.
These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth, and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ford Motor (F - Free Report) is one of the leading automakers in the world. Ford Motor has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 16% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 6.2%. Its shares have already gained 18.1% so far this year.
PulteGroup (PHM - Free Report) engages in homebuilding and financial services businesses, primarily in the United States. PulteGroup has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 22.7% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 16%. Its shares have already gained 58.1% year to date.
Adobe (ADBE - Free Report) is one of the largest software companies in the world. Adobe has a Zacks Rank #2 and a VGM 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 next five-year period is 13.4%. Its shares have already gained 34.9% so far this year.
Marriott International (MAR - Free Report) is a leading worldwide hospitality company. Marriott International has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 8.3% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 15.5%. Its shares have already gained 20.2% year to date.
Lennar (LEN - Free Report) is engaged in homebuilding and financial services in the United States. Lennar has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 0.7% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 6%. Its shares have already gained 26.2% so far this year.