The S&P 500 index closed at 3,130.01 on Jul 2, up 0.5% on the day. Markedly, the index surged 42.8% from its Mar 23 low of 2,191.86 and the benchmark grew 20% in the second quarter.
The index’s rally has been primarily driven by unprecedented government stimulus, reopening of U.S. and global economies post coronavirus-induced lockdowns and shelter-in-place guidelines, and improving consumer confidence.
Notably, the Conference Board’s Consumer Confidence Index rose to 98.1 in June, rebounding from May’s reading of 85.9 and April’s 85.7. This is the index’s largest jump since 2011, which however is much lower than its average reading of about 126 in 2019.
Moreover, the Expectations Index that evaluates how Americans view their next six months in terms of income, business and labor market conditions increased from 97.6 in May to 106 in June.
Further, a steady decline in jobless claims reflects improving conditions in the U.S. labor market. The Bureau of Labor Statistics June jobs report showed that 4.8 million jobs were added to the economy. The unemployment rate declined to 11.1% from 13.3% in May, which however, is much higher than 3.5% at the end of 2019.
The S&P’s upbeat momentum is expected to continue in the second half, driven by the growing optimism over steady economic revival.
Additionally, the Trump administration’s draft proposal of a $1-trillion stimulus plan to strengthen infrastructure, including roads, bridges and 5G, is expected to help the economy revive.
Although resurgence in coronavirus infection is worrying, chances of another nationwide lockdown is minimal, which should boost investor optimism.
Here we discuss five S&P 500 stocks that have shown great resilience amid the pandemic. Apart from having solid fundamentals, these stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, each of these stocks has a market cap of more than $10 billion.
Dollar General DG is riding on healthy demand amid the coronavirus outbreak. The company’s top line is expected to benefit from better pricing, private label offering, inventory management and merchandise initiatives in the near term.
Dollar General currently flaunts a Zacks Rank of 1 and a Growth Score of A. The Zacks Consensus Estimate for this $47.70-billion company’s fiscal 2021 earnings is pegged at $8.84 per share, having moved 18.2% north in the past 60 days.
Dollar General Corporation Price and Consensus
Dollar General Corporation price-consensus-chart | Dollar General Corporation Quote
Fortinet FTNT is gaining from rising cyber-attack risks that are propelling demand for its FortiMail platform, which can be used to block specific file types containing certain keywords, such as those related to coronavirus. This Zacks Rank #1 company is also capable of sending attachments to the FortiSandbox solution to check whether the file displays any malicious activity.
Fortinet has a Growth Score of A. The consensus mark for this $22.38-billion company’s 2020 earnings stands at $2.81 per share, having moved 9.3% north over the past 60 days.
Fortinet, Inc. Price and Consensus
Fortinet, Inc. price-consensus-chart | Fortinet, Inc. Quote
The Korger Co. KR is riding on solid coronavirus-led demand. This Zacks Rank #1 company has been making prudent investments to bolster omni-channel operations, improve supply chain and increase manpower to ensure swift customer service amid the outbreak. Moreover, expansion of contact-free payment solutions like Scan, Bag and Go and Kroger Pay as well as rising demand for Pickup orders that help in minimizing person-to-person interaction are key catalysts for this $26.06-billion company.
The Kroger also has a Growth Score of A. The consensus mark for fiscal 2020 earnings is pegged at $2.78 per share, having been raised 12.6% in the past 60 days.
The Kroger Co. Price and Consensus
The Kroger Co. price-consensus-chart | The Kroger Co. Quote
Fastenal’s FAST aggressive investment to increase Onsite locations, vending machines count and ecommerce business are expected to boost sales in the near future. This Zacks Rank #1 company reported solid May sales, led by notable gains in safety products.
This $25.23-billion company has a Growth Score of B. The Zacks Consensus Estimate for its 2020 earnings is pegged at $1.34 per share, having been revised 9.8% upward in the past 60 days.
Fastenal Company Price and Consensus
Fastenal Company price-consensus-chart | Fastenal Company Quote
MarketAxess Holdings MKTX benefits from steady rise in trading volumes that in turn drive commission. Growing adoption of this $19.03-billion company’s automated trading tools for both liquidity providers and liquidity takers are a key catalyst. Moreover, this Zacks #1 Ranked stock with a Growth Score of B enjoys strong liquidity position and has witnessed continuous growth in free cash flow.
The consensus mark for 2020 earnings is pegged at $7.08 per share, having been revised 2.9% upward in the past 60 days.
MarketAxess Holdings Inc. Price and Consensus
MarketAxess Holdings Inc. price-consensus-chart | MarketAxess Holdings Inc. Quote
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