Subscribe to Entrepreneur for $5
Subscribe

Wall Street Poised for a Thanksgiving Week Rally: 3 Growth Picks

As the market is positioned to do well in the Thanksgiving week, investing in growth stocks like Costco (COST), Dillard's (DDS), and Tesla (TSLA) seems judicious at the moment.

By
This story originally appeared on Zacks

Investors, at present, are concerned about whether the US stock market will gyrate during the Thanksgiving week or will there be a sustained upward movement? No doubt, there are issues that may derail the stock market’s upward journey. An increase in inflation is a raging concern amid the ongoing uncertainty regarding the leadership of the Federal Reserve. President Biden sooner or later will decide whether Jerome Powell should continue as Fed Chairman or Fed Gov. Lael Brainard should step in. Meanwhile, investors are also apprehensive about the spread of new covid cases in Europe and beyond, which may in due course affect the global economy vis-à-vis equity markets.

- Zacks

However, if history is a guide, the stock market has time and again done well during Thanksgiving week. At the same time, recent upbeat data on retail sales, labor market conditions, and industrial production do confirm that consumers and the broader economy are in pretty good shape, which certainly bodes well for stocks in the near term. Thus, prospects of near-term gains undoubtedly should be heartening to investors. Hence, it’s prudent for them to now invest in growth stocks like Costco Wholesale Corporation COST, Dillard’s, Inc. DDS, and Tesla, Inc. TSLA for better returns.

Stock-Market to Perform Well During Thanksgiving Week

The US stock market, historically, has performed well during Thanksgiving week. Citing a MarketWatch article, per Bespoke Investment Group, the S&P 500 in the Thanksgiving week gained an average 0.60 percentage point since 1945. Wednesday or the day before Thanksgiving registered the best returns.

CFRA’s chief investment strategist, Sam Stovall also stated that “there’s a two-thirds likelihood the market is up on the day before Thanksgiving and a 57% likelihood the day after Thanksgiving, and a 71% likelihood that it’s up on Monday,” as mentioned in a CNBC article.

And why won’t the market do well in the said period? Recent encouraging economic reports should boost stocks to end in the green this week and beyond. Despite an increase in the cost of goods and services, consumers did splurge in the month of October. Citing another CNBC article, sales at US retailers increased 1.7% last month, per the Commerce Department.

Additionally, during the same month, in the United States, 531,000 new jobs were added, while the jobless rate declined to 4.6%, quoting a financial times article. To top it, industrial output in the United States bounced back in October and topped expectations.

3 Top-Ranked Growth Stocks to Buy Right Away

With consumers splurging on discretionary items, new jobs being added, and industries ramping up production to meet a surge in demand, the economy as well as the stock market is surely poised to chug along in the near future. This calls for investing in the following three growth stocks that possess a Zacks Rank #1 (Strong Buy) and a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco Wholesale sells foods and general merchandise through membership warehouses. Costco Wholesale’s recent strategy to penetrate the e-commerce business has strengthened its position among its peers.

Costco Wholesale’s strategy to sell its products at a discounted price helped the company attract value-seeking customers. The Zacks Consensus Estimate for its current-year earnings has moved up 5% over the past 60 days. COST’s expected earnings growth rate for the current year is a steady 9.7%.

Dillard’s is a departmental store chain that features fashion apparel. Dillard’s quarterly performance in recent times has been commendable. Demand for Dillard’s products continues to gain steam despite global supply chain disruptions.

Dillard’s strength in men’s as well as children’s apparel bodes well.  The Zacks Consensus Estimate for its current-year earnings has moved up nearly 20% over the past 60 days. DDS’ expected earnings growth rate for the current year is a staggering 1,268.86%.

Tesla has lately joined the coveted $1T club. Tesla has been the second-fastest company to reach the milestone. Tesla’s future prospects look bright. This is because demand for an electric car is expected to climb in the near term as more and more countries are now striving to reduce carbon emissions (read more: Tesla is a Screaming Buy as It Joins the Elite $1T Club).

The Zacks Consensus Estimate for its current-year earnings has moved up 16.8% over the past 60 days. TSLA’s expected earnings growth rate for the current year is a superb 167%.



5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

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.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

Dillard's, Inc. (DDS): Free Stock Analysis Report

 

Costco Wholesale Corporation (COST): Free Stock Analysis Report

 

Tesla, Inc. (TSLA): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research