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November Marks Best Month Since 2022: 4 Best Sectors & Stock Picks

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In November, the stock market witnessed a significant upswing, attributed to a shift in investor sentiment. Investors now look ahead to potential rate cuts as stocks post their strongest monthly performance of 2023.

Previously, investors had been primarily focused on when the Federal Reserve would raise interest rates. However, during this month, their attention turned toward the possibility of rate cuts in the future. This shift in focus contributed to a surge in stock prices.

Interest Rate-Sensitive Sectors Lead the Momentum

The impressive market performance in November was led by sectors sensitive to interest rates. Real Estate ETF (XLRE - Free Report) and Technology ETF (XLK - Free Report) recorded gains of more than 12% during the month, while Financials ETF (XLF - Free Report) and Consumer Discretionary ETF (XLY - Free Report) also posted substantial increases of more than 10%.

Against this backdrop, we highlight one stock from each winning sector. These are Udemy (UDMY - Free Report) , Oscar Health (OSCR - Free Report) , consumer company Rocky Brands (RCKY - Free Report) and real estate development company Landsea Homes (LSEA - Free Report) .

Inside the Market Rally in November

The S&P 500, the Dow Jones Industrial Average, and the Nasdaq all recorded significant monthly gains. The S&P 500 closed the month with an impressive 8.9% increase, while the Nasdaq outperformed with a 10.7% rise, marking their best monthly gains since July 2022. The Dow Jones Industrial Average also saw a substantial 8.8% increase, representing its strongest monthly performance since October 2022.

Financial experts and analysts were surprised by the remarkable market rally in November. Callie Cox, an investment analyst at eToro US, noted that it was one of the best months witnessed in the last decade. This unexpected surge caught many investors off guard, especially following the Federal Reserve's flexible stance after its Nov 1 meeting, as quoted on Yahoo Finance.

The Federal Reserve played a pivotal role in driving the market surge. In its early November meeting, the Fed decided to keep interest rates steady, signaling a halt in rate hikes. This decision was reinforced by incoming economic data, which indicated that inflation was at its lowest level in more than two years. Additionally, job market data showed a labor market robust enough to support economic growth without igniting concerns about inflation.

Winning Stocks That Could Surge Higher in December

Udemy (UDMY - Free Report) – Up 68.14% Past Month

Udemy Inc. develops educational software solutions. The company offers an online course in various subjects including technology, Internet, business, creative and performing arts, health and fitness, language and music. The stock has an upbeat VGM Score of B. The stock also hails from a sector (top 25%) and industry (top 12%) that boast a strong Zacks Rank.

Currently, UDMY carries a Zacks Rank #2 (Buy).

Oscar Health (OSCR - Free Report) – Up 70.7%

Oscar Health Inc. is a digital health insurance company based in New York. The OSCR stock has a moderate VGM Score of C. The stock also hails from a sector (top 50%) and industry (top 12%) that boast strong a Zacks Rank.

Oscar Health currently holds a Zacks Rank #2.

Rocky Brands (RCKY - Free Report) – Up 129.1%

Rocky Brands Inc. is a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well-recognized brand names, including Rocky Outdoor Gear, Georgia Boot, Durango, Lehigh, and the licensed brand, Dickies. The stock has the best VGM Score of A. The stock comes from an industry (top 11%) that boasts a strong Zacks Rank.

RCKY presently sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Landsea Homes (LSEA - Free Report) – Up 32.4%

Landsea Homes Corporation is a publicly traded residential homebuilder, which designs and builds homes and sustainable master-planned communities, including suburban, single-family detached and attached homes, mid-rise properties, and master-planned communities. The stock has a moderate VGM Score of C. The stock comes from an industry (top 30%) that boasts a strong Zacks Rank. The sector rank (top 50%) is also upbeat.

Currently, LSEA carries a Zacks Rank #2.

(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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