5 Best-Performing Stocks Of February

Markets continued their winning run in 2019, extending the first month’s gains into January. Trade tensions declined, with President Trump announcing that he was delaying additional tariffs on China, slated to come into effect from March. Strong GDP and consumer confidence data added to the bullish sentiment. The Fed’s tone remained dovish, while fourth-quarter earnings remained robust despite a decline in pace.

February’s Performance

After a fabulous January, Wall Street’s rally continued in February. All the three major stock indexes — the Dow, S&P 500 and Nasdaq Composite — gained 3.7%, 3%, and 3.4%, respectively.

Year to date, the indexes have gained 11.1%. 11.1% and 13.5%, respectively. Several positive developments on the trade war front, the Fed’s decision to put rate hikes on the backburner and a rebound of energy and technology sectors were the major catalysts to the benchmarks’ gains.

Mixed Economic Data

The ISM Manufacturing Index for January surged to 56.6%, surpassing the consensus estimate of 54.3%. Construction spending for November increased 0.8%, beating the consensus estimate of 0.2%. Also, the U.S. economy added 304,000 jobs in January, significantly higher than the consensus estimate of 154,000.

On the negative side, the rate of joblessness did inch up from 3.9% to 4%, but this was primarily due to the recent government shutdown. Also, factory orders declined 0.6% in November.

Retail sales declined 1.2%, in December, the largest monthly drop since September 2009. Spurts in jobless claims and lower-than-expected increases in durable goods and factory orders also gave cause for concern.

Q4 GDP, Consumer Confidence Shine

The consumer confidence index climbed to 131.4 in February from a revised 121.7 in January. Consumers’ optimism was largely driven by strength in the labor market. This was also reflected in strong fourth-quarter GDP numbers.

The second estimate for fourth-quarter GDP revealed that the U.S. economy expanded 2.6% during this period, significantly higher than the expected pace of 2.4%. A 2.8% jump in consumer spending was primarily responsible for this strong reading.

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