HH Markets On Two-Weekly Winning Streak: 5 Great Momentum Picks

The markets have been witnessing a bull run in the first two weeks of July, signaling a recovery for Wall Street. Global trade war concerns and fear of growing inflation in the U.S. economy had been plaguing the U.S. stock markets for the first half of 2018.

In fact, stock market momentum remained largely unhindered despite recent volatility. Gradual easing of trade conflicts, steady economic activities and business-friendly policies adopted by the government will pave the way for further upside. At this stage, investment in stocks with strong price momentum and a favorable Zacks Rank will be lucrative.

Wall Street Witnesses Two-Weekly Rally

Wall Street first observed strong performance in the first two weeks of July. For the week ended Jul 6, all three major stock indexes — the Dow, S&P 500 and Nasdaq Composite — gained 0.8%, 1.5% and 2.4%, respectively. Likewise, for the week ended Jul 13, the Dow, S&P 500 and Nasdaq Composite rallied 2.3%, 1.5% and 1.8%. This two-week rally placed all three major indexes in positive territory year to date.

On Jul 13, the Dow ended at 25,019.41 points. The 30-stock blue-chip index closed above 25,000 for the first time since Jun 15. The S&P 500 closed at 2,801.31, reflecting the first finish above 2,800 since Feb.1. Tech-heavy Nasdaq Composite closed at 7,825.98, marking a fresh all-time high.

U.S. Economy Remains Robust

On Jul 6, the Department of Labor reported that the U.S. economy added 213,000 non-farm jobs in June outpacing the consensus estimate of 196,000. June’s job market data reduces concerns that the United States is in the late stage of economic expansion offering little sweetness for market participants.

Moreover, ISM manufacturing and services data for June, Commerce Department’s encouraging data on U.S. trade deficit in May as well as strong consumer credit data for May released by the Fed raised investors’ confidence.

The Labor Department data has also shown that for the month of June, average wage rate rose marginally by 0.2% to 2.7% on a year-over-year basis. This was lower than the consensus estimate of 2.8%. The low-wage hike indicates that hyperinflationary expectations are overblown which may enable the Fed to follow a steady state rate hike policy.

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