5 All-Star ETFs & Stocks To Buy On The Dip

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Wall Street has been on a tumultuous ride lately on rising inflation. This is especially true, as rising prices tend to squeeze margins and erode corporate profits for the growth companies, which usually have higher valuations.

Notably, U.S. consumer prices climbed the most since 2009 in April while producer prices also expanded the most in a decade. If inflation remains high for a sustained period of time, it could trigger earlier-than-expected tightening policies from the Federal Reserve though the central bank views inflation as temporary.

Additionally, a flare-up in coronavirus cases in parts of Asia has sparked concerns over the pace of a global economic recovery. India, Japan and other parts of Southeast Asia are battling a fresh surge in cases and tightening restrictions, with relatively slow vaccine rollouts and delays in reopening the economy.

Further, rounds of latest data have added to the chaos. Consumer confidence in early May tumbled with the preliminary reading for the University of Michigan Index of Consumer Sentiment dipping 6.2% from the month ago to 82.8 for May. U.S. retail sales were flat in April after jumping nearly 11% in March. Although U.S. industrial production rose 0.7% in April, it is down from a sharp increase of 2.4% in March. U.S. home construction also unexpectedly dropped a sharp 9.5% last month partially attributed to the delayed projects due to a surge in lumber prices and other supply constraints.

However, the economy is showing solid economic recovery backed by huge infrastructure and stimulus packages, widening reach of vaccinations and a healing job market. The combination has powered activities across all sectors and categories, resulting in increased consumer spending. Americans are spending on big-ticket items such as vacations and weddings, companies are going on hiring sprees, and the transition to new technologies such as electric vehicles is accelerating.

The U.S. economy grew 6.4% annually in the first quarter, representing the second-strongest increase since 2003 and is expected to top 7% this year, which would be the fastest since 1984, per several economists. This would follow the 3.5% contraction in 2020, which was the worst performance in 74 years.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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