Powell excited about key PCE data – could set the tone for the second quarter | MEM edge

The Federal Reserve’s preferred measure of inflation was released today, and it was “good” because there were no ugly surprises, according to Federal Reserve Chairman Jerome Powell. The news could boost markets as investors have been nervous about tight inflation data while interest rates remain relatively high. Of course, the stock and bond markets are closed today, so we won’t see traders’ reactions until next week.

Overall, we’re heading into next week on good terms, with the Dow, Nasdaq, and S&P 500 hitting new highs and small caps gaining after gaining an impressive 2.5%. Another positive news is that participation continues to expand well beyond the Magnificent Seven stocks that dominated last year’s top-performing list.

S&P 500 Index Daily Chart

With so much bullish behavior out there, it can be difficult to decide where to focus your efforts to outperform in a strong market. Through my work, focusing on companies with strong growth prospects will always pay off, especially during this bull market phase.

Many of the fastest-growing companies, especially in the technology sector, have already posted impressive returns this year and need a consolidation phase before making further progress. Instead, we are looking for stocks in sectors such as healthcare that have entered a new uptrend after trading sideways for the past three weeks. Although generally considered a defensive area of ​​the market, there are many companies that are growing rapidly amid the development of new drugs and medical products.

Healthcare Sector Daily Chart (XLV)

A prime example is Eli Lilly (LLY), which was added to my MEM Edge Report’s list of recommended holdings in early January. In addition to the company’s popular weight-loss drug Zepbound, which was approved late last year, the company is expected to seek approval for an Alzheimer’s drug in the next quarter.

LLY is trending upward in a tight trading range in anticipation of this FDA approval, and a recent period of consolidation has allowed the stock to recover from its overbought condition in February. A break above the recent high of $800 and a bullish MACD crossover would put the stock into strong buy territory.

Eli Lilly (LLY) daily chart

Other new areas are starting to emerge as well, and if you’d like to be notified of new buying ideas in these areas, try out the MEM Edge reports twice a week using the link here. You’ll also get in-depth insight into broader market conditions and what sector cycles are going on and why. Please take advantage of this offer!

warmly,

Mary Ellen McGonagle

MEM Investment Research