On Jun 2, the Dow, the S&P 500 and Nasdaq closed 1.1%, 0.8% and 0.6% higher, respectively, as investors shifted focus to reopening of the economy, looking past the civil unrest in multiple U.S. cities.
The U.S. administration has implemented adequate measures to ease lockdowns across the country, which were put in place to stem the spread of COVID-19.
Economy Reopening Overshadows Civil Unrest
Investors have also been keeping a close watch on civil unrest across 40 U.S. cities due to the death of an African American George Floyd at the hands of law enforcement officers on May 25. However, President Donald Trump has deployed National Guard in major cities andthreatened to deploy additional military troops for peacekeeping.
Bypassing the civil unrest, green shoots of economic rebound driven by positive economic data have helped lift market sentiments. On Jun 1, the Institute for Supply Management (ISM) reported that the ISM manufacturing index climbed to 43.1 in May, recovering from the 11-year low of 41.5 in April. The figure indicates expansion in manufacturing activities as several companies reopen and employees and suppliers return to work on easing of lockdowns.
Restart of business activity after months of closure has been a major reason behind the market rally. The Cboe Volatility Index that tracks implied volatility in the S&P 500 index fell 4.9% to 26.84 on Jun 2, which is the lowest since late February.
Why Growth Stocks?
Companies that are categorized as growth stocks are expected to grow at a rate significantly higher than the market. Hence, investors can buy in the dip and sell off to make profit as the market moves north.
These companies reinvest earnings to accelerate growth in the short term and do not pay out dividends. Moreover, these companies generally have unique product lines that attract loyal customers, creating a significant market hold in their respective industries.
5 Growth Stocks to Buy
Given the current situation, it would be prudent to invest in growth stocks as they tend to grow at a faster pace than the broader market. We have shortlisted five stocks that flaunt a Zacks Rank #1 (Strong Buy) and possess a
Growth Score of A.You can see the complete list of today’s Zacks #1 Rank stocks here. Calix, Inc. ( CALX Quick Quote CALX - Free Report) provides cloud and software platforms, and systems and services required to deliver the unified access network.The company has an expected earnings growth rate of more than 100% for the current year compared with the Zacks Communication - Infrastructure industry’s projected growth of 2.1%. The Zacks Consensus Estimate for its current-year earnings has moved up 22.2% over the past 60 days. Reed's, Inc. develops, manufactures, and sells natural hand-crafted beverages.The company has an expected earnings growth rate of 76.9% for the current quarter against the Zacks Beverages - Soft drinks industry’s projected decline of 8%. The Zacks Consensus Estimate for its current-year earnings has risen 25% over the past 60 days. ChannelAdvisor Corporation’s ( ECOM Quick Quote ECOM - Free Report) cloud platform helps brands and retailers improve their online performance. The company has an expected earnings growth rate of more than 100% for the current quarter against the Zacks Internet - Software and Services industry’s estimated decline of 67.8%. The Zacks Consensus Estimate for its current-year earnings has moved 32.7% north over the past 60 days. SunOpta Inc. ( STKL Quick Quote STKL - Free Report) manufactures and sells plant-based and fruit-based food and beverage products. The company has an expected earnings growth rate of 50% for the current quarter against the Zacks Food - Miscellaneous industry’s projected decline of 1.9%. The Zacks Consensus Estimate for its current-year earnings has moved up 11.8% over the past 60 days. AudioEye, Inc. ( AEYE Quick Quote AEYE - Free Report) provides web accessibility solutions to Internet, print, broadcast, and other media to people regardless of their network connection, device, location, or disabilities. The company has an expected earnings growth rate of 33.3% for the current quarter compared with the Zacks Internet - Software industry’s projected growth of 11.5%. The Zacks Consensus Estimate for its current-year earnings has risen 2.9% over the past 60 days. Zacks Top 10 Stocks for 2020
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