For Immediate Release
Chicago, IL - March 09, 2016 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include American Health Care Services ( AHS ), Tessera Technologies ( TSRA ) and Leggett & Platt ( LEG ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Tuesday's Analyst Blog:
Facts Are Stubborn Things: Zacks Market Strategy
March shows early spring to most parts of the USA. A warming trend was apparent across the U.S. stock markets.
Traders cited a number of factors driving the latest stock market rally…
- Fresh investor ammo went to work at the start of March.
· Fears fell about a slowing U.S. economy. A better than forecast report on the country's manufacturing activity in February counteracted a number of disappointing European and Asian factory surveys.
· Oil prices are holding above $35 a barrel. This calms concerns about difficulties facing the energy sector and its impact on exposed banks.
Finally, stock market watchers noted technical factors encouraged investors to go long on riskier assets.
· The S&P 500 held above perceived resistance at 1,950 and then 1,971, recapturing its 50-day moving average.
· The CBOE VIX options price index, a key measure of expected stock market volatility known as Wall Street's "fear gauge," fell below its long-term average of 20. I write on March 4th. The VIX was 16.7. This was at its lowest in 2016.
Divine the status further on U.S. markets by drawing upon the latest summary macro statistics. To Bears out there, here are those stubborn fundamental facts-
· On Friday March 4th, the U.S. government showed the economy added +242K jobs in February.
· +242K adds accelerated from January's upwardly revised gain of +172K.
· The fresh +242K data was a big beat. Economists forecasted +190K.
· Mark Zandi is chief economist at Moody's Analytics. His conclusion: turmoil in global financial markets hasn't had any impact on the U.S. labor market.
I have written before, and need to re-iterate, jobs data is a summary statistic. That means it summarizes activity across the economy. Regardless of the status of any forward-looking indicator, this contemporaneous indicator shows exactly the temperature across the entirely of the huge and diverse U.S. economy.
The latest U.S. jobs readings confirm. The temperature of the U.S. economy at mid-winter is improving, not stabilizing, and certainly not declining.
John Adams wrote long ago in 1770, in defense of the British soldiers involved in the Boston Massacre trials,
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence."
(Yes, you read that right. This nation's 2nd President defended British troops.)
A Key Excerpt from the SFO Fed-
The Chicago Fed National Activity Index (CFNAI) has proved useful as an early indicator of recessions. It is distilled from 85 monthly series drawn from four broad data categories: consumption and housing; employment, unemployment, and hours worked; sales, orders, and inventories; and production and income.
The index is constructed to have an average value of zero, with a positive reading indicating growth above trend and a negative reading indicating growth below trend.
The three-month moving average CFNAI is currently at -0.24, well above the threshold of -0.7 that has typically signaled the onset of a recession.
But as a caveat, it should be noted that the index has often dropped quickly in the months leading up to past downturns. For example, the index stood at -0.2 in July 2007, only five months before the start of the Great Recession.
"Few, if any, past recessions have been successfully predicted by professional forecasters."
Forecasting recessions is difficult because each one tends to differ in important ways from previous episodes. Past recessions have been triggered by upward spiking oil prices , increases in policy interest rates designed to bring down high inflation, and bursting asset price bubbles.
None of these scenarios would seem to fit the present circumstances.
Zacks March Sector/Industry/Company Telescope
March showed us a continuation of existing sector trends. Health Care, Info Tech, and Consumer Discretionary were leaders. These 3 sectors have remained the Attractive sectors for some time.
Utilities fell back to Attractive from Very Attractive. Financials stayed at Unattractive. The sole strong Financials industry was Investment Funds, given the turn in the stock markets.
Materials and Industrials sectors still look awful, dragged down by the Very Unattractive Energy sector. Yet in Energy, Alternatives look terrific. Drillers, E&P and Integrated Oil &Gas are the Zacks Rank bottom feeders.
(1) Health Care moved back up to Very Attractive. Focus on Medical Care, then Medical Products. Drugs stayed at Market Weight.
Zacks #1 Rank (Strong Buy) stock pick: American Health Care Services ( AHS )
AMN Healthcare Services, Inc. is a travel healthcare staffing company. It recruits and places nurses, physicians and other healthcare professionals in travel or permanent assignments in acute-care facilities, physician practice groups and other healthcare facilities.
The company's professionals include RNs, surgical technologists, nurse practitioners, respiratory therapists, radiology technologists, rehab professionals and therapy assistants.
AMN Healthcare Services, Inc. is headquartered in San Diego, CA.
(2) Info Tech stayed a Very Attractive sector. Misc. Tech led the way. Semiconductors and Electronics were close behind.
Zacks #1 Rank (Strong Buy) stock pick: Tessera Technologies ( TSRA )
Tessera Technologies develops semiconductor packaging technology that meets the demand for miniaturization and increased performance of electronic products.
Tessera licenses its technology to its customers, enabling them to produce semiconductors that are smaller and faster, and incorporate more features. These semiconductors are utilized in a broad range of communications, computing and consumer electronic products.
The company is headquartered in San Jose, CA.
(3) Consumer Discretionary fell to Attractive from Very Attractive. Apparel is hot. Home Furnishing-Appliance and Other Cons. Disc. is solid. All the remaining discretionary industries toggled around market weight.
Zacks #1 Rank (Strong Buy) stock pick: Leggett & Platt ( LEG )
Leggett & Platt, Inc. is one of the leading manufacturers of engineered products serving several major markets.
Sales and production are focused on residential furnishings, commercial furnishings, aluminum products, industrial materials, and specialized products.
The company has facilities throughout North America and in numerous international locations.
(4) Utilities fell back to Attractive. Water Supply looks good.
(5) Telcos remained a Market Weight.
(6) Financials remained Unattractive. The sole Attractive industry was Investment Funds, given the stock market's turn.
(7) Industrials remained Unattractive. Airlines kept their EPS upside in the falling oil price landscape. Machinery and Metal Fabricating keep getting clobbered. Railroads have been hit by Coal, Agriculture and Oil problems. Aerospace & Defense fell.
(8) Consumer Staples looked Very Unattractive again. The Agri-Business, Food, Soap & Cosmetics and Beverages industries look awful again.
(9) Materials remained Very Unattractive. The worst are Paper, Metals-non-Ferrous, Chemicals & Steel.
(10) Energy industries remain on the very bottom rung. The exception to that rule is Energy-Alternates. They are the big and only bright spot.
Oil & Gas Drilling, E&P and big integrated O&G remain buried anchors.
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