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Wall Street has been rejoicing for the past two months with the unprecedented U.S. central bank and government stimulus. Many have hoped for a V-shaped recovery, especially after the surprisingly upbeat May jobs report and some better-than-expected economic data points.
However, in the latest policy latest, Federal Reserve Chair Jerome Powell poured some cold water on the extra-euphoric Wall Street bulls, saying “millions” of people will not able to resume work for some time because of the aftershocks to businesses from the COVID-19 crisis. The Fed chief indicated that companies would face survival crisis amid the pandemic or some roles would just be obsolete in the new world order.
The Fed now expects the U.S. unemployment rate to hit 9.3% this year, dropping to 6.5% in 2021 and declining further to 5.5% in 2022. The unemployment rate in May dropped to 13.3% from 14.7% in April. Before the pandemic, the U.S. unemployment rate was hovering near the 50-year lows of around 3.6%.
The Fed sees American GDP falling by 6.5% in 2020 before rising by 5.0% in 2021 and 3.5% in 2022. The Fed reiterated that the Fed funds rate would stay in the 0% to 0.25% range for the foreseeable future and confirmed continued bond-buying.
The projections and Fed comments hint that the coronavirus-led economic crisis is far from over. So, one has to adjust himself in the post-pandemic world before taking an investing decision. Here’s how one can do that.
Tech Stocks to Rule
The sector is a coronavirus winner thanks to shift in consumer habits to a purely digital world with work, learn and shop from home. Big tech stocks propelled the broader stock market, especially the tech-heavy Nasdaq Composite Index, which has crossed the 10,000-milestone for the first time this week.
Further, technology has a solid Zacks Sector Rank, being in the top 25%. Tech companies are cash-rich. As of fourth-quarter 2019, cash, cash equivalents and marketable securities were at around $452.5 billion. In the tech space, cloud looks to be the most promising. DocuSign (DOCU - Free Report) and Zoom Video (ZM - Free Report) are two COVID-19 winners and appear to have further room to run.
Video Gaming Should Continue to Entertain Investors
Per changing life-style, usage of video games has been soaring in recent months. Highlighting the “new normal,” the NPD Group report showed that software sales rose 55% to $662 million in April.Final Fantasy VII: Remake stood out as the best-selling game, followed by Call of Duty: Modern Warfare and Nintendo’s (NTDOY) AnimalCrossing:New Horizons. The trend is likely to continue. Notably, VanEck Vectors Video Gaming and eSports ETF (ESPO) jumped 2.25 on Jun 10 while the Zacks Rank #2 (Buy) gaming stock Electronic Arts Inc. (EA) added 3.1%.
Staples Will Continue to Stand Out
Consumer staples has a solid Zacks Sector Rank of 2. Consumer staples, a non-cyclical sector, is likely to be less hammered in any economic downturn. The sector has already emerged as a true safe haven amid the coronavirus-triggered lockdowns that put a hold on non-essential items while people only stocked up groceries, healthcare and essential products.
Whatever the course of the economic progression, staples stocks and supermarkets should stand out. Zacks Rank #2 Grocery Outlet Holding Corp. (GO - Free Report) , KimberlyClark Corporation (KMB - Free Report) andZacks Rank #3 ColgatePalmolive Company (CL - Free Report) could gain ahead.
Who Can Forget Biotech & Pharma?
Medical is the top-rated Zacks sector now. And why not? The World Health Organization has recognized some 10 prime candidates for the potential vaccines as these have entered clinical trials. Plus, 114 candidate vaccines are in preclinical evaluation stage.
Per WHO, these candidates include mRNA-1273 vaccine by Moderna Inc. (MRNA - Free Report) , potential vaccine ChAdOx1 nCoV-19 from Oxford University (which is showing limited success as of now) in collaboration with AstraZeneca (AZN) and Serum Institute of India, RNA vaccine candidate from the collaboration between U.S.-based Pfizer and German pharmaceutical company BioNtech, and DNA-based vaccine from INOVIO Pharmaceuticals (INO).
Also, the announcement of Novavax's NVAX) vaccine trial came last month as drugmakers halted clinical trials on drugs for other ailments to focus on COVID-19. The company managed a lot of funding too for the manufacturing of its experimental COVID-19 vaccine. Johnson & Johnson (JNJ - Free Report) has announced that it will begin its early human trial for a potential vaccine in the second half of July.
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.
Image: Bigstock
Fed Sparks Economic Concerns: Winning Investment Strategies
Wall Street has been rejoicing for the past two months with the unprecedented U.S. central bank and government stimulus. Many have hoped for a V-shaped recovery, especially after the surprisingly upbeat May jobs report and some better-than-expected economic data points.
However, in the latest policy latest, Federal Reserve Chair Jerome Powell poured some cold water on the extra-euphoric Wall Street bulls, saying “millions” of people will not able to resume work for some time because of the aftershocks to businesses from the COVID-19 crisis. The Fed chief indicated that companies would face survival crisis amid the pandemic or some roles would just be obsolete in the new world order.
The Fed now expects the U.S. unemployment rate to hit 9.3% this year, dropping to 6.5% in 2021 and declining further to 5.5% in 2022. The unemployment rate in May dropped to 13.3% from 14.7% in April. Before the pandemic, the U.S. unemployment rate was hovering near the 50-year lows of around 3.6%.
The Fed sees American GDP falling by 6.5% in 2020 before rising by 5.0% in 2021 and 3.5% in 2022. The Fed reiterated that the Fed funds rate would stay in the 0% to 0.25% range for the foreseeable future and confirmed continued bond-buying.
The projections and Fed comments hint that the coronavirus-led economic crisis is far from over. So, one has to adjust himself in the post-pandemic world before taking an investing decision. Here’s how one can do that.
Tech Stocks to Rule
The sector is a coronavirus winner thanks to shift in consumer habits to a purely digital world with work, learn and shop from home. Big tech stocks propelled the broader stock market, especially the tech-heavy Nasdaq Composite Index, which has crossed the 10,000-milestone for the first time this week.
Further, technology has a solid Zacks Sector Rank, being in the top 25%. Tech companies are cash-rich. As of fourth-quarter 2019, cash, cash equivalents and marketable securities were at around $452.5 billion. In the tech space, cloud looks to be the most promising. DocuSign (DOCU - Free Report) and Zoom Video (ZM - Free Report) are two COVID-19 winners and appear to have further room to run.
Video Gaming Should Continue to Entertain Investors
Per changing life-style, usage of video games has been soaring in recent months. Highlighting the “new normal,” the NPD Group report showed that software sales rose 55% to $662 million in April.Final Fantasy VII: Remake stood out as the best-selling game, followed by Call of Duty: Modern Warfare and Nintendo’s (NTDOY) AnimalCrossing:New Horizons. The trend is likely to continue. Notably, VanEck Vectors Video Gaming and eSports ETF (ESPO) jumped 2.25 on Jun 10 while the Zacks Rank #2 (Buy) gaming stock Electronic Arts Inc. (EA) added 3.1%.
Staples Will Continue to Stand Out
Consumer staples has a solid Zacks Sector Rank of 2. Consumer staples, a non-cyclical sector, is likely to be less hammered in any economic downturn. The sector has already emerged as a true safe haven amid the coronavirus-triggered lockdowns that put a hold on non-essential items while people only stocked up groceries, healthcare and essential products.
Whatever the course of the economic progression, staples stocks and supermarkets should stand out. Zacks Rank #2 Grocery Outlet Holding Corp. (GO - Free Report) , KimberlyClark Corporation (KMB - Free Report) andZacks Rank #3 ColgatePalmolive Company (CL - Free Report) could gain ahead.
Who Can Forget Biotech & Pharma?
Medical is the top-rated Zacks sector now. And why not? The World Health Organization has recognized some 10 prime candidates for the potential vaccines as these have entered clinical trials. Plus, 114 candidate vaccines are in preclinical evaluation stage.
Per WHO, these candidates include mRNA-1273 vaccine by Moderna Inc. (MRNA - Free Report) , potential vaccine ChAdOx1 nCoV-19 from Oxford University (which is showing limited success as of now) in collaboration with AstraZeneca (AZN) and Serum Institute of India, RNA vaccine candidate from the collaboration between U.S.-based Pfizer and German pharmaceutical company BioNtech, and DNA-based vaccine from INOVIO Pharmaceuticals (INO).
Also, the announcement of Novavax's NVAX) vaccine trial came last month as drugmakers halted clinical trials on drugs for other ailments to focus on COVID-19. The company managed a lot of funding too for the manufacturing of its experimental COVID-19 vaccine. Johnson & Johnson (JNJ - Free Report) has announced that it will begin its early human trial for a potential vaccine in the second half of July.
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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