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The S&P 500 wrapped up its best month since October, gaining 6.5% amid various challenges. This remarkable performance is a testament to the resilience and dynamism of the American economy, even in the face of ongoing global uncertainties.
The S&P 500, which tracks the performance of 500 of the largest publicly traded companies in the United States, is widely regarded as a reliable barometer of the U.S. economy's health. Its recent surge is a clear indication of investor confidence and a strong signal of economic recovery.
Given the solid surge, many stocks in the S&P 500 have gained in double digits. We have highlighted five of them that have a Zacks Rank #1 (Strong Buy) or 2 (Buy), a Momentum Score of B or better and saw positive earnings estimate revisions for the current fiscal year over the past 30 days, suggesting continued outperformance. These include Royal Caribbean Cruises (RCL - Free Report) , Palo Alto Networks Inc. (PANW - Free Report) , Cummins (CMI - Free Report) , Lennar (LEN - Free Report) and Trane Technologies (TT - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Several factors have contributed to this impressive performance. Let's delve into some of the key drivers behind this surge.
Strong Corporate Earnings
One of the primary drivers behind the S&P 500's strong performance is robust corporate earnings. Many companies have reported better-than-expected earnings, reflecting a strong rebound in business activities. This has been particularly evident in sectors such as technology and consumer discretionary, which have seen a significant uptick in demand as the economy continues to recover.
Economic Indicators
Positive economic indicators have also played a crucial role in boosting investor confidence. Recent data shows a steady decline in unemployment rates and a surge in consumer spending, both of which are positive signs for the economy. Additionally, inflation rates have remained relatively stable, alleviating concerns about runaway price increases.
Monetary Policy
The Federal Reserve's accommodative monetary policy has also been a significant factor in the S&P 500's strong performance. By keeping interest rates low and continuing its bond-buying program, the Fed has ensured ample liquidity in the market, making it easier for businesses to borrow and invest.
Market Optimism
Finally, market optimism has played a significant role in the S&P 500's surge. Investors seem to be betting on a strong economic recovery, buoyed by the rapid pace of COVID-19 vaccinations and the easing of pandemic-related restrictions. This optimism is reflected in the increased risk appetite among investors, leading to a surge in equity investments.
More Upside in July?
If historical patterns are any indication, July is poised to be another strong month for equities. Over the past decade, both the S&P 500 and Nasdaq have consistently performed exceptionally well in July, making it the best month of the year for them since 2009. The Dow Jones Industrial Average also fared impressively, ranking as the second-best month in terms of performance.
Looking at the numbers, the S&P 500 has experienced an average monthly gain of 3.3% in July, while the Nasdaq has seen an average rally of 4.1%. The Dow's average monthly gain of 2.8% in July is only slightly below its best month of the year, which was November, with a gain of 2.9% since 2009. Importantly, none of these indexes have recorded a decline during the month of July since 2014.
Per The Almanac, the month of July is historically the fourth-best month of the year for the S&P 500. Bespoke points out that July recently has been even better. "Over the last 10 years, performance has been even stronger with the S&P 500 averaging a gain of 3.3% and positive returns 90% of the time, including each of the last eight years."
Best Stocks of S&P 500
Royal Caribbean is a cruise company that owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. The stock skyrocketed 19.7% last month and saw a positive earnings estimate revision of a penny over the past 30 days for this year.
Royal Caribbean has a Zacks Rank #2 and a Momentum Score of B.
Palo Alto Networks offers network security solutions to enterprises, service providers and government entities worldwide. The stock surged nearly 17% in June.
PANW saw a positive earnings estimate revision of 4 cents for the fiscal year (ending July 2023. It has a Zacks Rank #1 and carries a solid Momentum Score of A.
Cummins is a leading global designer, manufacturer and distributor of diesel and natural gas engines and powertrain-related component products. The stock soared nearly 14% last month.
Cummins has seen a positive earnings estimate revision of a penny over the past 30 days for this year. It has a Zacks Rank #2 and a Momentum Score of A.
Lennar is engaged in homebuilding and financial services in the United States. Earnings estimates for Lennar have risen by $2.89 over the past 30 days for the fiscal year ending November 2023.
Lennar gained 12% in June and has a Zacks Rank #1. It has a Momentum Score of B.
Trane Technologies is a designer, manufacturer, seller and servicer of climate control products for heating, ventilation, air conditioning and transport solutions. The stock rose about 10.5% in June.
Trane Technologies saw a positive earnings estimate revision of a penny for this year over the past 30 days. It has a Zacks Rank #2 and a solid Momentum Score of A.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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5 Top-Ranked S&P 500 Stocks to Buy in July
The S&P 500 wrapped up its best month since October, gaining 6.5% amid various challenges. This remarkable performance is a testament to the resilience and dynamism of the American economy, even in the face of ongoing global uncertainties.
The S&P 500, which tracks the performance of 500 of the largest publicly traded companies in the United States, is widely regarded as a reliable barometer of the U.S. economy's health. Its recent surge is a clear indication of investor confidence and a strong signal of economic recovery.
Given the solid surge, many stocks in the S&P 500 have gained in double digits. We have highlighted five of them that have a Zacks Rank #1 (Strong Buy) or 2 (Buy), a Momentum Score of B or better and saw positive earnings estimate revisions for the current fiscal year over the past 30 days, suggesting continued outperformance. These include Royal Caribbean Cruises (RCL - Free Report) , Palo Alto Networks Inc. (PANW - Free Report) , Cummins (CMI - Free Report) , Lennar (LEN - Free Report) and Trane Technologies (TT - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Several factors have contributed to this impressive performance. Let's delve into some of the key drivers behind this surge.
Strong Corporate Earnings
One of the primary drivers behind the S&P 500's strong performance is robust corporate earnings. Many companies have reported better-than-expected earnings, reflecting a strong rebound in business activities. This has been particularly evident in sectors such as technology and consumer discretionary, which have seen a significant uptick in demand as the economy continues to recover.
Economic Indicators
Positive economic indicators have also played a crucial role in boosting investor confidence. Recent data shows a steady decline in unemployment rates and a surge in consumer spending, both of which are positive signs for the economy. Additionally, inflation rates have remained relatively stable, alleviating concerns about runaway price increases.
Monetary Policy
The Federal Reserve's accommodative monetary policy has also been a significant factor in the S&P 500's strong performance. By keeping interest rates low and continuing its bond-buying program, the Fed has ensured ample liquidity in the market, making it easier for businesses to borrow and invest.
Market Optimism
Finally, market optimism has played a significant role in the S&P 500's surge. Investors seem to be betting on a strong economic recovery, buoyed by the rapid pace of COVID-19 vaccinations and the easing of pandemic-related restrictions. This optimism is reflected in the increased risk appetite among investors, leading to a surge in equity investments.
More Upside in July?
If historical patterns are any indication, July is poised to be another strong month for equities. Over the past decade, both the S&P 500 and Nasdaq have consistently performed exceptionally well in July, making it the best month of the year for them since 2009. The Dow Jones Industrial Average also fared impressively, ranking as the second-best month in terms of performance.
Looking at the numbers, the S&P 500 has experienced an average monthly gain of 3.3% in July, while the Nasdaq has seen an average rally of 4.1%. The Dow's average monthly gain of 2.8% in July is only slightly below its best month of the year, which was November, with a gain of 2.9% since 2009. Importantly, none of these indexes have recorded a decline during the month of July since 2014.
Per The Almanac, the month of July is historically the fourth-best month of the year for the S&P 500. Bespoke points out that July recently has been even better. "Over the last 10 years, performance has been even stronger with the S&P 500 averaging a gain of 3.3% and positive returns 90% of the time, including each of the last eight years."
Best Stocks of S&P 500
Royal Caribbean is a cruise company that owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. The stock skyrocketed 19.7% last month and saw a positive earnings estimate revision of a penny over the past 30 days for this year.
Royal Caribbean has a Zacks Rank #2 and a Momentum Score of B.
Palo Alto Networks offers network security solutions to enterprises, service providers and government entities worldwide. The stock surged nearly 17% in June.
PANW saw a positive earnings estimate revision of 4 cents for the fiscal year (ending July 2023. It has a Zacks Rank #1 and carries a solid Momentum Score of A.
Cummins is a leading global designer, manufacturer and distributor of diesel and natural gas engines and powertrain-related component products. The stock soared nearly 14% last month.
Cummins has seen a positive earnings estimate revision of a penny over the past 30 days for this year. It has a Zacks Rank #2 and a Momentum Score of A.
Lennar is engaged in homebuilding and financial services in the United States. Earnings estimates for Lennar have risen by $2.89 over the past 30 days for the fiscal year ending November 2023.
Lennar gained 12% in June and has a Zacks Rank #1. It has a Momentum Score of B.
Trane Technologies is a designer, manufacturer, seller and servicer of climate control products for heating, ventilation, air conditioning and transport solutions. The stock rose about 10.5% in June.
Trane Technologies saw a positive earnings estimate revision of a penny for this year over the past 30 days. It has a Zacks Rank #2 and a solid Momentum Score of A.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.