We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Blue-Chip Stocks to Buy as the Dow Breezes Past 38,000
Read MoreHide Full Article
After experiencing a remarkable December, the Dow continued its upward momentum and closed above the coveted 38,000 mark for the first time on Jan 22. The 30-stock blue-chip index took only 25 trading sessions to jump 1,000 points to set a record close. The index surpassed the 37,000 milestone on Dec 13.
It’s the shortest time the Dow has taken to add 1000 points since the period between 33,000 and 34,000, per Dow Jones Market Data. Also, the move between 37,000 to 38,000 represented an increase of 2.7% for the 30-stock benchmark.
Despite stretched valuation, the blue-chip stocks are climbing northward and have more room to rise due to the Federal Reserve’s dovish outlook and the rising optimism that the economy would avoid a recession this year.
The Fed has kept its interest rates unchanged at 5.25% to 5.5% and has hinted at rate cuts this year as inflationary pressure has begun to show signs of cooling down. The Fed’s intention to curb monetary tightening bodes well for the economy and, in turn, the stock market. This is because rate cuts boost consumer spending and reduce the cost of borrowing.
The U.S. economy, anyhow, is showing immense strength as consumers remain confident about their well-being amid a sturdy labor market. The University of Michigan stated that its consumer sentiment index had hit its highest level in January since July 2021. Americans are feeling optimistic about the economic scenario as jobs are being added at a steady clip and the unemployment rate remains low.
Meanwhile, the National Association of Business Economics stated that almost 91% of the respondents have said that there is a 50% or less chance of the U.S. economy entering a recession in the next 12-month period. Many of them believe that corporate profits will rise this year as inflation is falling at a faster-than-expected pace, supply-chain bottlenecks ebb, and labor shortages ease.
Amid such positives, it’s prudent for investors to place bets on fundamentally sound blue-chip stocks such as Microsoft Corporation (MSFT - Free Report) , Salesforce, Inc. (CRM - Free Report) and Apple Inc. (AAPL - Free Report) that are well-positioned to capitalize on the broader market uptrend. These stocks have solid balance sheets, a steady stream of cash flows, and large market capitalization. They currently carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Microsoft is one of the largest broad-based technology providers in the world. Revenues from the intelligent cloud business, primarily driven by growth in Azure, are aiding Microsoft.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.1% over the past 60 days. MSFT’s expected earnings growth rate for the current year is 13.6%. Its projected earnings growth rate for the next five-year period is 15.5%.
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software. Strong clientele and diverse products are benefiting Salesforce.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.7% over the past 60 days. CRM’s expected earnings growth rate for the current year is 56.5%. Its projected earnings growth rate for the next five-year period is 21.5%.
Apple's business primarily runs around its flagship iPhone. Apple is gaining from its growing services and wearable businesses.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.6% over the past 60 days. AAPL’s expected earnings growth rate for the current year is 7.8%. Its projected earnings growth rate for the next five-year period is 11%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Blue-Chip Stocks to Buy as the Dow Breezes Past 38,000
After experiencing a remarkable December, the Dow continued its upward momentum and closed above the coveted 38,000 mark for the first time on Jan 22. The 30-stock blue-chip index took only 25 trading sessions to jump 1,000 points to set a record close. The index surpassed the 37,000 milestone on Dec 13.
It’s the shortest time the Dow has taken to add 1000 points since the period between 33,000 and 34,000, per Dow Jones Market Data. Also, the move between 37,000 to 38,000 represented an increase of 2.7% for the 30-stock benchmark.
Despite stretched valuation, the blue-chip stocks are climbing northward and have more room to rise due to the Federal Reserve’s dovish outlook and the rising optimism that the economy would avoid a recession this year.
The Fed has kept its interest rates unchanged at 5.25% to 5.5% and has hinted at rate cuts this year as inflationary pressure has begun to show signs of cooling down. The Fed’s intention to curb monetary tightening bodes well for the economy and, in turn, the stock market. This is because rate cuts boost consumer spending and reduce the cost of borrowing.
The U.S. economy, anyhow, is showing immense strength as consumers remain confident about their well-being amid a sturdy labor market. The University of Michigan stated that its consumer sentiment index had hit its highest level in January since July 2021. Americans are feeling optimistic about the economic scenario as jobs are being added at a steady clip and the unemployment rate remains low.
Meanwhile, the National Association of Business Economics stated that almost 91% of the respondents have said that there is a 50% or less chance of the U.S. economy entering a recession in the next 12-month period. Many of them believe that corporate profits will rise this year as inflation is falling at a faster-than-expected pace, supply-chain bottlenecks ebb, and labor shortages ease.
Amid such positives, it’s prudent for investors to place bets on fundamentally sound blue-chip stocks such as Microsoft Corporation (MSFT - Free Report) , Salesforce, Inc. (CRM - Free Report) and Apple Inc. (AAPL - Free Report) that are well-positioned to capitalize on the broader market uptrend. These stocks have solid balance sheets, a steady stream of cash flows, and large market capitalization. They currently carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Microsoft is one of the largest broad-based technology providers in the world. Revenues from the intelligent cloud business, primarily driven by growth in Azure, are aiding Microsoft.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.1% over the past 60 days. MSFT’s expected earnings growth rate for the current year is 13.6%. Its projected earnings growth rate for the next five-year period is 15.5%.
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software. Strong clientele and diverse products are benefiting Salesforce.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.7% over the past 60 days. CRM’s expected earnings growth rate for the current year is 56.5%. Its projected earnings growth rate for the next five-year period is 21.5%.
Apple's business primarily runs around its flagship iPhone. Apple is gaining from its growing services and wearable businesses.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.6% over the past 60 days. AAPL’s expected earnings growth rate for the current year is 7.8%. Its projected earnings growth rate for the next five-year period is 11%.