MSCI - 2 Growth Stocks I Am Buying Aggressively In May
2024-05-09 16:05:29 ET
Summary
- A stock market correction did not occur despite concerns about sustainability of momentum into H2.
- Q1 earnings for US companies have been positive, with many beating expectations.
- Positive economic developments and revised growth forecasts are pushing the market's valuation into stretched territory.
- Instead of buying the market as such, I recommend picking individual companies in today's landscape.
- I present two companies whose stocks were punished following Q1 earnings and now present attractive return potential.
The Market Correction That Never Came
On average a stock market correction occurs every 1.2 years, defined as a decline of 10% or more, resetting valuations and setting the stage for the next leg up.
After a strong start to the year, with the SPDR S&P 500 ETF Trust ( SPY ) returning over 10% in Q1, investors started questioning whether the momentum is sustainable into H2.
As a result of their outlook revision and rebalancing of portfolios, combined with the 10Y Treasury yield spiking to 4.66% in April, driven by consumer strength, perhaps signaling a need for another rate hike (unlikely in my view), or no rate cuts in 2024, the market has pulled back by 5.5% at its lowest point. This is giving investors a chance to accumulate equities at perhaps slightly better valuations....
2 Growth Stocks I Am Buying Aggressively In May