On Sep 23, equities logged their best day since July, with the major indexes on their way to shake off their earlier weakness on Evergrande news. China real estate developer Evergrande agreed to settle interest payments on a domestic bond, while the Chinese central bank injected cash into the banking system, to eradicate global market fears of contagion from the debt-laden property developer and its default risks.
Evergrande fears shook the markets lately on a potential of the Lehman-like crisis. However, equity investors now seem to overlook uncertainty over monetary and fiscal policy and ongoing debates in Washington over the debt ceiling. Buy-the-dip strategy also helped boost equities.
Cyclical sectors outperformed as the Federal Reserve stressed on the economic progress. The Fed has also gave cues of an imminent QE taper. “It’s not a surprise to me that the Fed is moving forward with the tapering,” Jeff Schulze, ClearBridge chief investment strategist, told Yahoo Finance. “If you think about the three-month moving average … we’re at about 740,000 jobs created per month. That is stronger than anything we’ve ever seen pre-COVID,” as quoted on Yahoo Finance (read: Fed Taper to Start in November? 7 ETFs to Buy).
The benchmark U.S. 10-year yield touched 1.41% to reach its highest level since July on taper talks. Investors seemed okay with this rise in rates as growth stocks did not seem to have taken a hit on Sep 23. Economic progress probably has helped investors to keep patience and encouraged them to invest in the corporate strength.
Against this backdrop, below we highlight a few stocks of the S&P 500 that played to a crucial role in boosting the index on Sep 23.
Stocks in Focus
Amazon.com Inc. AMZN – Weight 3.95%; Up 1.06%
Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe.
NVIDIA Corporation NVDA – Weight 1.47%; Up 2.59%
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence (AI) based solutions that now support high performance computing (HPC), gaming and virtual reality (VR) platforms. The stock has a Zacks Rank #2 (Buy).
JPMorgan Chase & Co. JPM – Weight 1.25%; Up 3.38%
JPMorgan Chase & Co. is one of the biggest global banks with assets valued at $3.68 trillion and stockholders’ equity worth $286.4 billion as of Jun 30, 2021. With operations in more than 60 countries, the company (incorporated under Delaware law in 1968) is one of the largest financial service firms in the world. Being a bank, the stock is a beneficiary of the Fed taper cues as banks do fare better in a rising rate environment. The stock has a Zacks Rank #3 (Hold).
Visa Inc. Class A V – Weight 1.00%; Up 2.50%
Visa operates retail electronic payments network worldwide. The company went public in March 2008 via an initial public offering (IPO). The stock has a Zacks Rank #3.
PayPal Holdings Inc (PYPL) – Weight 0.86%; Up 2.56%
The Zacks Rank #3 PayPal has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and two-sided platform that enables it to offer smooth and secure transaction facility to both customers and merchants.
salesforce.com inc. CRM – Weight 0.67%; Up 7.21%
The Zacks Rank #3 company is the leading provider of on-demand Customer Relationship Management (CRM) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics and custom application development.
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