It has been a choppy ride for the stock market so far this year. The U.S.-China trade war, uncertainty over Brexit, tech weakness, declining oil prices, the U.S. Federal Reserve’s hawkish stance related to interest rate hikes are factors that induced volatility.
These developments overshadowed upbeat U.S. GDP and lower unemployment levels keeping the stock market highly strained.
A View of the Macroeconomic Factors
The U.S.-China trade war that resulted in tariffs on imports from China worth $250 billion ($50 billion in August & $200 billion in September) negatively impacted technology, materials and industrial sectors.
Moreover, British Prime Minister Theresa May’s tentative “withdrawal agreement” with the European Union (EU) failed to get an approval from her own party, increasing uncertainty over Brexit. The United Kingdom is scheduled to leave the EU on Mar 29, 2019 — deal or no deal.
Further, the technology sector is having a shattering year, thanks to heightened concerns over data privacy that have called for increased regulation and strict monitoring of social media companies globally.
Moreover, implementation of General Data Protection Regulation (GDPR) impeded growth in Europe. Further, NAND price crash and the tariffs on semiconductors owing to trade tensions brought no respite.
A Guide to the Right Picks
Volatility and macro-economic headwinds dragged down several stocks in 2018. Although the story of 2019 is in the making, the trade war truce, an anticipated pick-up in the economy and better job prospects are likely to turn things around on the bourses.
However, finding stocks that are likely to rebound in 2019 is no mean feat.
Here, Zacks’ proprietary methodology comes in handy. Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer good investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here we pick five stocks that not only flaunt a Zacks Rank #1 but also have solid fundamentals. Notably, these stocks have lost more than 30% so far in 2018.
Our Stock Picks
Castlight Health, Inc. (NYSE:CSLT) shares have shed 36% year to date, underperforming the 4.1% rally of the industry it belongs to. Walmart’s refusal to renew contract with the company marred performance in 2018.
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