Following a strong start to the year, Wall Street faced some challenges in recent weeks due to concerns about inflation and escalating geopolitical tensions. The S&P 500 dropped below the 5,100 level, marking its worst week since October 2023. All 11 major sectors in the S&P 500 ended the week in the red for the first time since September 2023.
The Dow Jones experienced its largest weekly percentage decline since March 2023, losing 2.5%, while the Nasdaq Composite Index fell by 0.6%. Despite the overall market downturn, there are some stocks worth considering with a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a VGM Score of B or better. These include Globe Life Inc. (GL), Dell Technologies (DELL), Dream Finders Homes Inc. (DFH), Flywire Corporation (FLYW), and Iqiyi Inc. (IQ).
Recent events in the Middle East, such as Iran’s missile and drone attacks on Israel, have raised concerns about a broader conflict in the region. This could lead to a spike in oil prices, potentially fueling inflation and causing the Federal Reserve to rethink its approach to interest rate cuts. Additionally, positive economic data suggesting a stronger economy may delay anticipated rate cuts in the first half of the year.
Retail sales exceeded expectations and consumer prices rose faster than anticipated in March, driving inflation higher and dampening hopes for imminent rate cuts. This scenario suggests that interest rates may remain higher for longer than initially expected.
Major bank earnings failed to impress investors, resulting in a broad decline in bank shares. JPMorgan Chase & Co, Citigroup, and Wells Fargo all fell short of expectations. JPMorgan reported lower-than-expected net interest income, Wells Fargo saw a 7% profit decline due to reduced borrowing demand, and Citigroup incurred losses due to expenses related to employee terminations and deposit insurance.
In light of recent market developments, DailyBubble believes that investors should consider stocks like Globe Life, Dell Technologies, Dream Finders Homes, Flywire Corporation, and Iqiyi. These companies have strong growth potential and favorable rankings from Zacks. While market conditions may be challenging, strategic investments in these stocks could present opportunities for long-term gains.