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Market Celebrates 9-Year Bull Run: Best Sectors & Their Top Stocks

Zacks

Even a flurry of economic and political headwinds have not been able to stop the bulls, which have turned nine today. It represents the second largest bull-run in history after the 1990s rally that ended when the tech bubble burst in 2000.

This is especially true as the U.S. economy has come a long way in emerging from the ills of the financial crisis and the Great Recession driven by robust job gains, growing wages, slowly rising inflation, increasing consumer spending, recovering housing market and record level of consumer confidence.

Additionally, strong corporate earnings, pick-up in economic activities across the globe, and optimism surrounding Trump’s pro-growth policies have been the biggest catalyst for the stocks in the recent year. A rebound is oil price is also adding to the strength.

While all the three major indices — S&P 500, Dow Jones Industrial Average and Nasdaq — more than tripled, Nasdaq has been the largest winner of the nine-year bull run, gaining about 487% since hitting a low of 1,265.52 on Mar 9, 2009. Meanwhile, the S&P 500 and the Dow Jones gained 305% and 280%, respectively.

The impressive surge came despite the latest market turmoil that had pushed the indices into a correction territory (a decline of more than 10% from their last peak reached in late January) on Feb 8 and wiped out about $2.5 trillion from the S&P 500 market value. However, this is not the worst nightmare in the recent history. The most dreadful situation was the scary start seen in 2016 when the S&P 500 and the Nasdaq recorded their worst New Year’s Day in 15 years and Dow Jones saw the worst start since 2008. The chaos sent the major bourses into a bear territory on Feb 11, 2016 with a drop of more than 20% from the last peak.

Government shutdown, debt crisis, the Middle East conflict, China turmoil, recession in Japan, geopolitical tensions, the oil price carnage, political turmoil in Greece, Brexit and Trump’s anti-trade and protectionist policies kept crossing paths with the bulls during this period of time.

Winners

While almost all the sectors have flourished in the Bull Market, aerospace and consumer discretionary led the way per Zacks, generating returns of about 464% and 414%, respectively. This was followed by gains of 357% for retail and 355% for business services. All the four sectors have a solid placement with Zacks rank in the top 19% for aerospace, top 50% for consumer discretionary, top 31% for retail and top 38% for business services.

Below we have highlighted the best-performing stocks from these wining sectors that have top Zacks Rank #1 (Strong Buy) or 2 (Buy) and are expected to continue their uptrend in the coming years for as long as the bullish fundamentals prevail.

Aerospace – Raytheon Company RTN

Based in Waltham, MA, Raytheon is a technology and innovation leader specializing in defense and other government markets throughout the world. The company has a long history of beating earnings estimates in the Bull Market. It missed the Zacks Consensus Estimate only once and that was in the second quarter of 2014 by 11.32%. RTN is expected to generate strong earnings growth of 26.77% and 15.23%, for this year and the next, respectively. The stock has a Zacks Rank #2 (Buy) and a VGM Score of B. It gained 513.8% in the nine-year Bull Market and hails from a top-ranked Zacks industry (top 30%). You can see the complete list of today’s Zacks #1 Rank stocks here.



Consumer Discretionary – Brunswick Corporation BC

Based in Mettawa, IL, Brunswick designs, manufactures and markets recreation products worldwide. The earnings surprise activity for the stock appears to be solid with just five quarterly misses in the second-largest Bull Market. The company has a projected earnings growth of 17.99% and 12.02%, respectively, for this year and the next. The stock soared about 2727% and has a Zacks Rank #2. It also belongs to a top Zacks industry (top 18%) and has a VGM Score of A.



Retail – Dillard's Inc. DDS

Based in Little Rock, AR, Dillard’s operates as a fashion apparel, cosmetics and home furnishing retailer in the United States. Though the company’s earnings surprise activity is not inspiring over the past nine years, having missed in several quarters, its shares skyrocketed nearly 2550%. Dillard’s is expected to generate solid earnings growth of 21.25% for this fiscal year but earnings decline of 11.6% in the next. The stock has a Zacks Rank #1 and a VGM Score of A. It further belongs to a top-ranked Zacks industry (top 1%).



Business Services – On Assignment Inc. ASGN

Based in Calabasas, CA, On Assignment is one of the foremost providers of in-demand, highly skilled professionals in the technology, digital, creative, healthcare technology, and life sciences sectors. This company also has a good track of beating earnings estimate with just eight misses in the Bull Market. It has strong estimated earnings growth of 23.28% for this year and 9.66% for the next. The stock has a Zacks Rank #2 and a VGM Score of B. It shot up around 5604% in the same time frame and belongs to a top-ranked Zacks industry (top 10%).



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