In the past couple of months, the Dow has had a superb run, with the blue-chip index hitting another record high on Jan 9. The index gained 211.81 points, or 0.7%, to close at 28,956.90 after touching an intraday high of 28,988.01. Thus, the index is tantalizingly close to another psychological milestone of 29,000. The Dow had steered past the coveted 28,000 mark for the first time in its 120-year history on Nov 15.
Some may say that round figures like 29,000 aren’t necessarily significant for the stock market but let’s admit it does reflect growing upbeat sentiment. And the latest Dow rally comes after the United States and Iran refrained from further military aggression.
U.S. President Trump had given clear indication that there won’t be any U.S. military strikes following an Iranian missile attack on U.S. bases in Iraq. Trump had announced that the missile strikes resulted in little damage and no American lives were lost. Instead, he endorsed less lethal tools to prevent Iran from acquiring a nuclear weapon. He ordered additional economic sanctions against Iran as well.
By the way, news that China’s top trade negotiator, Vice Premier Liu He would travel to the United States to sign the “phase one” partial deal helped the blue-chip index climb north. Positive developments on the trade front have always been a market driver because Trump’s imposition of import tariffs has always slowed down global economic growth.
As Dow bulls regained confidence in the geopolitical outlook, the solid state of the domestic economy boosted investors’ sentiment. The latest ADP report on nonfarm employment was literally impressive. The report stated that the domestic economy breached the 200,000 level in job creations and smashed forecasts by 42,000 jobs.
In fact, the U.S. economy continues to hold ground, displaying outstanding resilience. After all, consumer spending has increased significantly and consumers are now more confident about their well-being. And as consumer outlays remain healthy, led by record low unemployment rate, investors certainly expect the economy to continue expanding this year as well.
5 Blue-Chip Stocks to Buy Now
Thanks to the aforementioned bullish factors, there has been a particularly sharp run-up in the 120-year-old index of 30 stocks. These companies are slated to gain in the near term as they have strong balance sheet and solid cash flow. Hence, it makes sense to invest in solid blue-chip stocks that can make the most of a Dow rally. We have, thus, selected five such blue-chip stocks that have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
JPMorgan Chase & Co. (JPM - Free Report) operates as a financial services company. The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% in the past 60 days. The stock’s expected earnings growth rate for the current year is 15.7% versus the Banks - Major Regional industry’s estimated increase of 5.5%.
Johnson & Johnson (JNJ - Free Report) researches and develops, manufactures, and sells various products in the health care field. The Zacks Consensus Estimate for its current-year earnings has risen 0.7% in the past 90 days. The stock’s expected earnings growth rate for the next quarter is 10.5% against the Large Cap Pharmaceuticals industry’s estimated decline of 54.6%.
American Express Company (AXP - Free Report) provides charge and credit payment card products, and travel-related services to consumers and businesses. The Zacks Consensus Estimate for its current-year earnings has increased 0.1% in the past 90 days. The stock’s expected earnings growth rate for the current year is 10.9% versus the Financial - Miscellaneous Services industry’s projected increase of 1.7%.
NIKE, Inc. (NKE - Free Report) develops, markets, and sells athletic footwear, apparel, equipment, and accessories. The Zacks Consensus Estimate for its current-year earnings has increased 1.3% in the past 60 days. The stock’s expected earnings growth rate for the current year is 20.9% versus the Shoes and Retail Apparel industry’s estimated increase of 9.8%.
Apple Inc. (AAPL - Free Report) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. The Zacks Consensus Estimate for its current-year earnings has increased 0.3% in the past 60 days. The stock’s expected earnings growth rate for the current year is 10.2% versus the Computer - Mini computers industry’s expected rise of 9.9%.
Shares of JPMorgan, Johnson & Johnson, American Express, NIKE and Apple have gained 36.9%, 12.1%, 30.1%, 32.8% and 101.3%, respectively, over the past year. Take a look —
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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