S&P 500 Hits 2,900: Best Performing Stocks YTD

Thanks to easing trade tensions and the U.S.-Mexico deal, the country’s stock market continues to enjoy the longest bull run since World War II. Notably, the S&P 500 hit 2,900 for the first time in history and closed at record highs for the third consecutive session. The index is up 8.4% so far this year.

The surge was driven by the dual tailwinds of solid corporate earnings and a booming economy as suggested by rounds of upbeat data. The U.S. economy is witnessing the fastest pace of growth in nearly four years with a nearly two-decade low unemployment rate of 3.9% and 18-year high consumer confidence. Historic tax cuts, higher government spending, and deregulation are fueling exceptional growth.

For the quarter as a whole, total Q2 earnings for the index are expected to be up 24.9% from the same period last year on 9.7% higher revenues. This exceeds 24.6% earnings growth in the first quarter 2018, which was the highest quarterly growth pace since 2010.

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Additionally, the Fed is on track for gradual rate hikes this year, citing that the economy is strong and can handle a tighter monetary policy. The central bank, which began to tighten monetary policy in 2015, has raised rates twice this year in quarter-point increments and is widely expected to do so again next month and in December. A rising rate scenario also signals a strengthening economy, which is spurring growth in the stock market.

While there are winners from various corners of the space, we have highlighted five stocks on the S&P 500 that have outperformed so far this year. Additionally, their strong performance is expected to continue given that these have a solid Zacks Rank #1 (Strong Buy) or 2 (Buy), a VGM Score of A or B, above-average estimated earnings growth for this year and positive estimate revisions over the past 90 days. Moreover, these stocks belong to top-ranked Zacks industry.