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The Dow recorded a positive result over the weekend of July 15, posting an increase of 658 points, and was up another 167 points at noon on July 18. The biggest gains at the close of trade last week came mostly from big banks and investment firms, but UnitedHealth led the pack, up nearly 5.5%, MSN reported.
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The overall rise in the Dow Jones, according to MSN, was primarily due to strong earnings reports from several companies, but was also bolstered by promising news from the Fed.
Fed Governor Christopher Waller and St. Louis Fed President James Bullard said in an interview with The Associated Press that the Fed was looking at a 0.75 percentage point hike — rather than a full leap – at the next meeting of the Federal Open Market Committee.
Given this news, it may be worth taking a look at some of the hottest stocks of the week and deciding if they are good investments in a bear market.
Big Bank Stocks Rise
Citigroup, Wells Fargo and JPMorgan Chase lined up just behind UnitedHealth to lead the pack with the biggest gains last week. High interest rates bode well for banks, as these rates will increase their lending income. Interest rates on loans and credit cards tend to rise faster – and more – than savings rates, which is bad for consumers, but good for banks (and for investors buying or hold bank shares). In an interview with Yahoo Finance, however, JPMorgan Chase CEO Jamie Dimon said consumers are in “very good shape” for a recession, with less leverage, strong savings and more discretionary income. than in 2008 or the Great Recession that followed.
Other financial actions to consider
Amid rising interest rates, credit and charge card company American Express is also doing well, posting a 4.4% increase on July 15. Investment firm Goldman Sachs saw a similar increase, with strong commercial and consumer loans, MSN detailed.
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Healthcare stocks show strong future
In general, healthcare stocks tend to be less sensitive to the vagaries of the market. People can’t control when they get sick or will need medicine, so the stock prices of healthcare companies tend to be more dependent on the business philosophies and actions of individual companies.
In this respect, UnitedHealth and Walgreens Boots Alliance both shine. Walgreens Boots Alliance’s growth strategy and partnership with Village MD promise solid gains, according to Nasdaq.com. With a dividend yield of 5%, The Motley Fool recommends this stock as a buy-and-hold stock.
Similarly, Dow leader UnitedHealth Group last week posted earnings that beat analysts’ estimates, according to MSN. MarketBeat classifies it as a moderate buy, with 15 buy odds, a strong buy and a hold. It pays an annual dividend of $6.60 per share.
Thinking About Other Equity Investments
Looking to capitalize on growth in finance and healthcare without investing directly in one of these companies?
Experts at The Motley Fool, via a guest post on Nasdaq.com, tout Salesforce customer relationship management software as a stock on the verge of skyrocketing.
While its customers include e-commerce businesses, retailers, and sales teams of all stripes, healthcare and financial companies also rely on CRM (customer relationship management) software. As these industries grow, so will the demand for CRM platforms – and Salesforce holds number one. 1 market share in global CRM spending for nine years, according to Nasdaq.
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A bear market can be a good time to increase your positions in successful companies or dive into new markets. Make sure you invest with a solid plan, understand your risk tolerance, and never invest more than you can afford.
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