U.S. equities are surging higher on Wednesday thanks in part to a strong payroll report that lifts expectations for Friday’s non-farm jobs report.
ADP reported 263,000 jobs created in March, above the 170,000 expected and the 245,000 reported for February. This is allaying concerns about the “hard data” vs. “soft data” rift that’s been seen recently; in that survey-based measures of economic confidence were disconnected from more tepid measures of how the economy was actually doing.
Other catalysts, from ongoing hawkishness from the Federal Reserve to continues legislative gridlock from President Trump, are being ignored by Wall Street.
As a result, a number of popular mega-cap stocks are pushing higher, putting the relative weakness seen throughout March behind them to resume the post-election uptrend that has pushed stocks to new records. Here are five names to watch:
Mega-Cap Stocks to Buy: Caterpillar (CAT)
Caterpillar Inc. (NYSE:CAT) shares are lifting back toward the upper end of their six-month consolidation range. This capped an impressive 80%-plus rally off of the early 2016 low as OPEC jawboning — and the eventual signing of a production freeze agreement — lifted expectations for heavy equipment sales to the energy sector. Moreover, commodity prices in general have recovered as the global growth outlook has improved.
The company will next report results on April 27 before the bell. Analysts are looking for earnings of 59 cents per share on revenues of $9.1 billion. Watch for a lift to prior highs near $101 (a 5% gain from here). It remains a zone of resistance that has frustrated the bulls going all the way back to 2011.
Mega-Cap Stocks to Buy: General Electric (GE)
General Electric Company (NYSE:GE) shares are lifting up and over their 200-day moving average and look ready to exit a three-month consolidation range to challenge the highs set late last year.
Profit-taking following the post-election surge in industrial stocks — on hopes of a Trump-driven tax reform and stimulus spending — resulted in a 50% retracement of the gains. This returned the stock to the very middle of a three-year sideways trading range. Merely a return to the upper end of that range will be worth a 7% gain from here.
The company will next report results on April 21 before the bell. Analysts are looking for earnings of 17 cents per share on revenues of $26.4 billion. Edge Pro subscribers are enjoying a near 20% gain in their April $30 GE calls recommended on March 31.
Mega-Cap Stocks to Buy: Amazon (AMZN)
Amazon.com, Inc. (NASDAQ:AMZN) shares are on fire, up some 10% since late March, boosting the fortunes of founder and CEO Jeff Bezos, who is on track to become the world’s richest man. This is classic momentum buying, with investors piling in as shares crossed the $900-a-share threshold for the first time ever.
Recent catalysts include reports the company is looking to buy NFL streaming rights and an upgrade from analysts at BMO Capital, who are now looking for a $1,200 price target — a 30% gain from here.
The company will next report results on May 4 after the close. Analysts are looking for earnings of $1.13 per share on revenues of $35.3 billion.
Mega-Cap Stocks to Buy: eBay (EBAY)
Ebay Inc (NASDAQ:EBAY) shares are lifting up and out of a three-month consolidation range with resistance near $34.50.
Barclays initiated coverage of the consumer internet sector on March 29, noting the next five-plus years will be “Golden Years” for mobile as most companies in the space have transitioned their business models to monetize the channel. They assigned a “buy” rating and are looking for a price target of $41, which would be worth nearly a 20% gain from here.
The company will next report results on April 19 after the bell. Analysts are looking for earnings of 48 cents per share on revenues of $2.2 billion.
Mega-Cap Stocks to Buy: Intel (INTC)
Intel Corporation (NASDAQ:INTC) shares are rebounding off of support from its 200-day moving average, moving back to the upper end of a trading range going back to September.
Shares have been largely treading water since late 2014 as the launch of Windows 10 wasn’t the catalyst expected, competitor Advanced Micro Devices, Inc. (NASDAQ:AMD) stepped up its game, and the market shifted attention to new technologies like autonomous transport. INTC has responded, such as with its recent acquisition of AV vision maker Mobileye NV (NYSE:MBLY).
Edge Pro subscribers are holding a position in the April $37 INTC calls. Merely a retest of the late January high near $38 will be enough for a 100% gain in the position. The company will next report results on April 27 after the close. Analysts are looking for earnings of 65 cents per share on revenues of $14.8 billion.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.
