Wall Street showed a strong revival from the vicious sell-off seen last week, with major indices back in the green territory for the year. Both the Dow Jones Industrial Average and the S&P 500 Index climbed for the fourth consecutive session, surging at least 4.5% each. In fact, the S&P 500 index witnessed the strongest four-day performance since mid-2016.
This is especially true as inflation fears, which had sent the major indices to a correction territory, started to fizzle out following the latest inflation data. Although inflation rose faster than expected in January, year-over-year increase remained unchanged at 1.8%, setting the stage for no aggressive rates hike; the speculation of which has sent the major indices to a correction territory. Notably, the Fed plans to raise interest rates three times this year.
Additionally, retail sales saw an unprecedented fall in January, recording the biggest drop in nearly a year. This has also eased inflationary pressure signaling that the economy is not overheated.
Apart from this, encouraging fundamentals have rekindled the appeal for riskier assets. Strong corporate earnings, optimism on global growth and the euphoria surrounding the new tax legislation are acting as the key catalysts. A massive $1.5-trillion tax cut will create an economic surge, boosting job growth and reflation trade. It will further accelerate earnings, leading to increased dividend and buyback activities. Additionally, low unemployment, higher consumer spending and rising consumer confidence are adding to the strength.
While there are several stocks to play the stock market rebound, we have presented five of them that tend to gain more than their counterparts. All these stocks have a top Zacks Rank #1 (Strong Buy) and Momentum Score of A, plus belong to a top-ranked Zacks industry (in the top 25%). Moreover, these have seen positive earnings estimate revision for fiscal 2018 over the past 30 days and foresee double-digit earnings growth for fiscal 2018. All these suggest their outperformance in a rebounding market. You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips (COP - Free Report)
Based in Houston, TX, ConocoPhillips is a major global exploration and production (E&P) company with operations all over the world. The company has seen solid earnings estimate revision of 85 cents for this year over the past month, and has an expected earnings growth rate of 375%. The stock belongs to a top-ranked Zacks industry (top 3%).
Mobile Mini Inc. (MINI - Free Report)
Based in Phoenix, AZ, Mobile Mini is the world's leading provider of portable storage and specialty containment solutions. It saw solid earnings estimate revision of 29 cents for this year over the past month and has an expected earnings growth rate of 43.10%. The stock belongs to a top-ranked Zacks industry (top 6%).
TD Ameritrade Holding Corporation (AMTD - Free Report)
Based in Omaha, NE, TD Ameritrade provides securities brokerage and related technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. The stock has seen solid earnings estimate revision of 37 cents over the past month for fiscal year (ending September 2018), reflecting year-over-year earnings growth of 62.50%. The stock is placed in a top-ranked Zacks industry (top 11%).
Beacon Roofing Supply Inc. (BECN - Free Report)
Based in Herndon, VA, Beacon Roofing is one of the largest distributors of residential and non-residential roofing materials in the United States and Canada. The Zacks Consensus Estimate for 2018 has moved up from $3.13 to $3.48 over the past month and the expected growth rate is 59.63%. It falls under the industry having a rank in the top 13%.
Kforce Inc. (KFRC - Free Report)
Based in Tampa, FL, Kforce provides professional and technical specialty staffing services and solutions in the United States and internationally. It saw solid earnings estimate revision of 37 cents for this year over the past month and has an expected earnings growth rate of 35.67%. Kforce falls in a top-ranked Zacks industry (top 22%).
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