5 Stocks at the Forefront of S&P 500 ETF’s Latest Rally

Wall Street has regained momentum in recent sessions, with the S&P 500 Index logging in the fourth consecutive gain. The benchmark reclaimed the 5,200 level in the latest trading session before ending below the level. This can be attributed to solid corporate earnings and renewed bets for Fed rate cuts that have rekindled investors’ interest in the stock market. Additionally, the resurgence in tech stocks with the resumption of the AI craze added to the strength (read: S&P 500’s Best 3-Day Run in 2024: ETF Areas That Won).

SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 Index, has risen 3% in the past week. While many stocks have powered the ETF, we have highlighted five that led the way higher. These are Bio-Techne Corporation TECH, Howmet Aerospace HWM, Garmin Ltd. GRMN, Aptiv PLC APTV and Amcor AMCR.

The picture emerging from the first-quarter earnings season continues to be one of steady improvement and resilience, with the earnings growth pace modestly accelerating and estimates for the coming periods starting to increase. Total earnings of the 310 S&P 500 members that have reported first-quarter results have risen 5% from the same period last year on 4.5% higher revenues, with 78.1% beating EPS estimates and 59.4% beating revenue estimates.

A softer-than-expected jobs report revived bets for an earlier rate cut from the Federal Reserve. U.S. service sector activity also unexpectedly contracted in April after growing for 15 consecutive months. The futures market is now pricing in at least two interest rate cuts by the end of the year. Traders are now wagering that the central bank will begin trimming rates as soon as September but still maintained only around a 44% probability of such a scenario, according to the CME Fedwatch tool. However, the Fed, in its latest policy meeting, signaled that its fight against inflation will continue for a longer period, setting the stage for a period of extended higher rates (read: 4 Sector ETFs & Stocks Likely to Benefit Despite Soft Jobs Data).

In another recent weak data, consumer confidence dropped last month to the lowest level since mid-2022. Additionally, the world’s biggest economy had a weak start to the year, expanding at the slowest pace in two years due to lower consumer and government spending amid growing inflation.

Let’s take a closer look at the fundamentals of SPY.

SPY in Focus

SPDR S&P 500 ETF Trust holds 502 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.

SPDR S&P 500 ETF Trust has an AUM of $505.5 billion and charges 9 bps in fees per year. It trades in an average daily volume of 63 million shares and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).

Below, we have highlighted the abovementioned five best-performing stocks in the ETF.

Best-Performing Stocks of SPY

Bio-Techne is a global life sciences company that develops, manufactures, and sells biotechnology products and clinical diagnostic controls. The stock has jumped 22.5% over the past week.

Bio-Techne is expected to post an earnings decline of 11.6% for the fiscal year ending June 2024 and has a Zacks Rank #3 (Hold).

Howmet Aerospace is engaged in providing engineered solutions for customers in the transportation and aerospace (both defense and commercial) industries. The stock has jumped 19.6% over the week. Howmet Aerospace saw a solid earnings estimate revision of 11 cents over the past seven days for this year and has an estimated growth rate of 24.46%.

HWM currently has a Zacks Rank #1 (Strong Buy) and a Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Garmin is an original equipment manufacturer of navigation and communication equipment that incorporates global positioning system-based technology. The stock has gained 17.6% in the past week.

Garmin saw a solid earnings estimate revision of 15 cents over the past seven days for this year. It has a Zacks Rank #1 and a Momentum Score of B.

Aptiv is one of the leading global technology and mobility companies, which mainly serves the automotive sector. It is a designer and manufacturer of vehicle components as well as a provider of electrical, electronic and safety technology solutions to the global automotive market. The stock has risen about 17% and has an estimated earnings growth of 21.8% for this year.

Aptiv saw a solid earnings estimate revision of 29 cents over the past seven days for this year and has a Zacks Rank #3. It has a Momentum Score of A.

Amcor is a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal care, and other products. The stock has gained 13% in a week.

Amcor is expected to post an earnings decline of 5.5% this fiscal year (ending June 2024). It has a Zacks Rank #2 and a Value Score of A.

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