Stocks Up On Oversold Conditions And Hope For Economic Relief

Plus New Zacks Strong Buys for Wednesday, March 11 [Kevin Matras] Profit from the Pros By Kevin Matras Executive Vice President [Zacks Investment Research] Stocks Up On Oversold Conditions And Hope For Economic Relief Stocks closed solidly higher yesterday, making up more than half of Monday's decline. After a strong open, stocks quickly turned around and retested Monday's lows. But once those held, it was off to the races. Worries over the coronavirus are going to be with us for a while. But it feels like the panic is starting to subside, at least in the U.S. High concern is warranted. And so are precautionary measures to avoid getting it. But this is not the end of the world. Same goes for the economic impact. Nobody yet knows to what extent. And some industries will be hit much harder than others. But the idea that commerce will grind to a halt and nobody will make any money is just not reality. Lastly, the oil price war between Russia and Saudi Arabia will eventually come to an end as well. And that will be one less thing weighing on the market. And those were likely all contributing factors to yesterday's rebound. The markets also cheered talk of a possible economic stimulus package. The President proposed "very substantial relief" for those hit hardest by the coronavirus. There have also been reports that the administration is considering a payroll tax cut for the rest of the year, among other things. We will have to see what happens. But the market clearly liked what it heard. Nonetheless, I think the market has more room to run on the upside regardless if any of these economic initiatives get passed. The reason is because I believe the recent pullback was only a correction and nothing more. So far, the correction for the S&P, at its worst, was down by -19.26%. Although now it's 'only' down -14.88%. But -19.26% is getting close to the lower limits (-19.99%) of what a correction is. Anything beyond that (-20% or greater), is technically a bear market. But I just don't see a bear market developing. For one, bear markets typically coincide with a recession. But with a strong GDP (even with the coronavirus), 50-year low unemployment, 20-year high in household income, near record high consumer confidence, and interest rates near historic lows, I just don't see anything that even remotely suggests a recession. So I believe stocks have lots of room to rally. Volatility is here to stay for a while. And we could still see more downside. But for now, there's a good chance the lows are. And if it truly looks like the worst case scenario will be avoided (health-wise and economic-wise), then stocks should continue to climb higher. And once the worst is behind us, the U.S. economy and stocks are expected to soar as pent-up economic demand in unleashed. So make sure you're taking full advantage of this correction. See you tomorrow, Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [The Top 5 Tech Stocks for 2020]( Eric Fry has identified five megatrends that will be booming for a very long time. And so will these five stocks that investors can use to build their wealth as these tech trends soar. All are profiled in a brand-new free report – Top 5 Stocks for 2020. [Click here for access.]( Most Popular Articles from Zacks.com [Bright Near-Term Outlook for Semi Communications Industry]( The industry has gained 18.7% over the past year compared with the S&P 500's rise of 5.5% and the broader sector's rally of 10.9%. [Read More »]( [5 Stocks to Win Big From Trump's Economic Stimulus]( Consumer discretionary companies in particular are well poised to grow on signs of renewed strength in consumer spending. [Read More »]( [3 Investing Strategies to Survive the Dramatic Oil Crash]( While one needs to have an appetite for risk in order to invest in energy at this point of time, there are still opportunities for savvy investors to earn big returns. [Read More »]( [What To Do with Beyond Meat Stock?]( There are some really big positives here that come only once in a while and this stock feeds new trends that have taken a while to develop. [Read More »]( [4 Sector ETF Winners of Bull Market Look Resilient to Virus]( We take a look at these sectors winners of the 11-year old bull market which look to survive despite the coronavirus scare. [Read More »]( Sponsor [Low-Priced Stocks with Sky-High Potential]( Zacks is now revealing its top stock recommendations priced under $10 per share. Each is a high-quality company with prospects for gains of 2X and even more. Recently, our recommendations have closed returns as high as +142.9% and +109.4%. Strong earnings growth plus other Zacks' indicators mark our rare Under $10 stocks for sustained growth. Look into them today, and then ride the potential profits high and long. [See Top Stocks Under $10 Now >>]( [Bull of the Day: Texas Roadhouse (TXRH)]( There is plenty of meat on this bone and a solid earnings report has analyst revising estimates upward. [Read More »]( [New Zacks Strong Buys for March 11th]( Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. [Read More »]( Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com. [Download our Zacks App for Apple iOS]( [Download our Zacks App for Android]( Visit [Success Stories]( to hear how Zacks research, tools and portfolios help our members outperform the market. Get all of our market insights and much more when you connect with us. [Visit Zacks on Facebook]( [Follow Zacks on Twitter]( [See Zacks videos on YouTube]( [Join Zacks on LinkedIn]( [Read Zacks Commentary on StockTwits]( This free resource is being sent by [Zacks.com](. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. [www.zacks.com/disclaimer](. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through February 3, 2020. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit [( for information about the performance numbers displayed above. Zacks Emails If you would prefer to not receive future profit-producing emails from [Zacks.com]( the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, then please [click here]( and confirm your request. If you have trouble with the unsubscribe link, please email support@zacks.com. Zacks Investment Research 10 S. Riverside Plaza, Suite 1600 Chicago, IL 60606