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Will Wall Street Trick or Treat? 5 Top Picks for Holiday Season
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In the first half of 2023, Wall Street delivered an upbeat performance, with the S&P 500, the Nasdaq and the Dow Jones gaining about 14%, 29.5% and 2.4%, respectively. Better-than-expected corporate earnings and the AI boom were the key trends in the first half.
However, the wining trend faltered in the second half. In July, the S&P 500 and the Nasdaq marked their fifth successive positive month, only to register flat performances in August. Wall Street's vigor waned due to a sequence of bank downgrades and expectations of higher-for-longer interest rates.
September was also not sturdy. As a result, the third quarter was an average-to-downbeat period for investors, mainly due to rising rates. But the feeble trend continued even in the fourth quarter of 2023, with stocks registering a considerable decline in October.
Hence, it is obvious that investors are scratching their heads to find out what lies ahead in the final two months of the year, which forms the all-important holiday season. Over the past decade, the fourth quarter of the year has actually been the best for the stock market, with the Dow, the S&P 500 and the Nasdaq up at least 4% on average, per a CNBC article.
Although the S&P 500 has entered the correction territory, top-ranked stocks like Spotify Technology (SPOT - Free Report) , PlayAGS (AGS - Free Report) , Potbelly (PBPB - Free Report) , Matson (MATX - Free Report) and AMC Entertainment (AMC - Free Report) should outperform in the holiday season.
S&P 500 Enters Correction Zone: Will It Gain/Lose Ahead?
The S&P 500 has fallen 10% since the start of July. The autumn pullback in the stock market sent the S&P 500 into correction territory and made the index record its worst two-week decline of the year due to rising rates, per Wall Street Journal.
The Bank of America believes that the S&P 500 could decline another 5% and test a critical support level that has previously marked the bottom. Agreed, the Fed is likely to enact a rate hike in November. Inflationary pressure, rising rate worries and geopolitical crisis are present. But those threats are currently priced in the valuation. Moreover, inflation is falling and rates are peaking.
Hence, according to Oppenheimer's chief investment strategist John Stoltzfus, the S&P 500 is due for a massive rally by the end of the year, as the Fed is eyeing a dial-back its rate hike momentum, as quoted on Business Insider. In an interview with CNBC on Thursday, Stoltzfus reiterated his S&P 500 price target of 4,900 by the end of the year, marking about a 19% rally in the final two months of the year.
Markets are expecting interest rate cuts by mid-next year, with investors pricing in an 80% chance that rates could be lower than their current level by July 2024, according to the CME FedWatch tool. That could be bullish for stocks, considering that rate hikes wreaked havoc on the S&P 500 down heavily in 2022.
Stock Picks
Against this backdrop, we highlight a few stocks that have a Zacks Rank #1 (Strong Buy) or #2 (Buy) and have witnessed the Zacks Consensus Estimate for their upcoming quarter’s earnings surging more than 10% in the past month. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Rank #2 company provides music streaming services. The company offers commercial free music and ad-supported services to subscribers. The Zacks Consensus Estimate for the December quarter skyrocketed 2465%.
The Zacks Rank #2 company is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. The Zacks Consensus Estimate for the December quarter surged 344%.
The Zacks Rank #2 company is a neighborhood sandwich concept. The company manages establishments for consuming food on premises to offers sandwiches, salads, soups, chili, chips, cookies, ice cream and smoothies. The Zacks Consensus Estimate for the December quarter jumped 100%.
The Zacks Rank #1 company operates as an ocean transportation and logistics company. It offers shipping services in Hawaii, Guam, and Micronesia islands and expedited service from China to southern California. The Zacks Consensus Estimate for the December quarter grew about 42%.
The Zacks Rank #1 company operates as a theatrical exhibition company primarily in the United States and internationally. It owns interests in theatres and screens. The Zacks Consensus Estimate for the December quarter grew about 24.3%.
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Will Wall Street Trick or Treat? 5 Top Picks for Holiday Season
In the first half of 2023, Wall Street delivered an upbeat performance, with the S&P 500, the Nasdaq and the Dow Jones gaining about 14%, 29.5% and 2.4%, respectively. Better-than-expected corporate earnings and the AI boom were the key trends in the first half.
However, the wining trend faltered in the second half. In July, the S&P 500 and the Nasdaq marked their fifth successive positive month, only to register flat performances in August. Wall Street's vigor waned due to a sequence of bank downgrades and expectations of higher-for-longer interest rates.
September was also not sturdy. As a result, the third quarter was an average-to-downbeat period for investors, mainly due to rising rates. But the feeble trend continued even in the fourth quarter of 2023, with stocks registering a considerable decline in October.
Hence, it is obvious that investors are scratching their heads to find out what lies ahead in the final two months of the year, which forms the all-important holiday season. Over the past decade, the fourth quarter of the year has actually been the best for the stock market, with the Dow, the S&P 500 and the Nasdaq up at least 4% on average, per a CNBC article.
Although the S&P 500 has entered the correction territory, top-ranked stocks like Spotify Technology (SPOT - Free Report) , PlayAGS (AGS - Free Report) , Potbelly (PBPB - Free Report) , Matson (MATX - Free Report) and AMC Entertainment (AMC - Free Report) should outperform in the holiday season.
S&P 500 Enters Correction Zone: Will It Gain/Lose Ahead?
The S&P 500 has fallen 10% since the start of July. The autumn pullback in the stock market sent the S&P 500 into correction territory and made the index record its worst two-week decline of the year due to rising rates, per Wall Street Journal.
The Bank of America believes that the S&P 500 could decline another 5% and test a critical support level that has previously marked the bottom. Agreed, the Fed is likely to enact a rate hike in November. Inflationary pressure, rising rate worries and geopolitical crisis are present. But those threats are currently priced in the valuation. Moreover, inflation is falling and rates are peaking.
Hence, according to Oppenheimer's chief investment strategist John Stoltzfus, the S&P 500 is due for a massive rally by the end of the year, as the Fed is eyeing a dial-back its rate hike momentum, as quoted on Business Insider. In an interview with CNBC on Thursday, Stoltzfus reiterated his S&P 500 price target of 4,900 by the end of the year, marking about a 19% rally in the final two months of the year.
Markets are expecting interest rate cuts by mid-next year, with investors pricing in an 80% chance that rates could be lower than their current level by July 2024, according to the CME FedWatch tool. That could be bullish for stocks, considering that rate hikes wreaked havoc on the S&P 500 down heavily in 2022.
Stock Picks
Against this backdrop, we highlight a few stocks that have a Zacks Rank #1 (Strong Buy) or #2 (Buy) and have witnessed the Zacks Consensus Estimate for their upcoming quarter’s earnings surging more than 10% in the past month. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spotify Technology (SPOT - Free Report)
The Zacks Rank #2 company provides music streaming services. The company offers commercial free music and ad-supported services to subscribers. The Zacks Consensus Estimate for the December quarter skyrocketed 2465%.
PlayAGS (AGS - Free Report)
The Zacks Rank #2 company is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. The Zacks Consensus Estimate for the December quarter surged 344%.
Potbelly (PBPB - Free Report)
The Zacks Rank #2 company is a neighborhood sandwich concept. The company manages establishments for consuming food on premises to offers sandwiches, salads, soups, chili, chips, cookies, ice cream and smoothies. The Zacks Consensus Estimate for the December quarter jumped 100%.
Matson (MATX - Free Report)
The Zacks Rank #1 company operates as an ocean transportation and logistics company. It offers shipping services in Hawaii, Guam, and Micronesia islands and expedited service from China to southern California. The Zacks Consensus Estimate for the December quarter grew about 42%.
AMC Entertainment (AMC - Free Report)
The Zacks Rank #1 company operates as a theatrical exhibition company primarily in the United States and internationally. It owns interests in theatres and screens. The Zacks Consensus Estimate for the December quarter grew about 24.3%.