HENDRICK
09-19 19:43

The recent Fed interest rate cut is likely to benefit sectors that are sensitive to borrowing costs and consumer spending. Specifically, cyclical sectors like consumer discretionary, utilities, and real estate investment trusts (REITs) tend to perform well after a rate cut. Lower interest rates reduce borrowing costs, encouraging both corporate expansion and consumer spending, especially on big-ticket items such as cars and electronics.

Here are three stock recommendations from sectors likely to benefit:

1. Amazon (AMZN) - As a major player in consumer discretionary, Amazon benefits from increased consumer spending when borrowing costs decrease.

2. Tesla (TSLA) - Tesla, part of both the consumer discretionary and industrial sectors, may see more demand for its vehicles as financing becomes more affordable for consumers.

 3. Prologis (PLD) - A leading REIT, Prologis could see gains as lower interest rates reduce debt costs for property purchases and boost demand in the real estate market.

These stocks could perform well in a low-interest environment due to their industry positions and ability to leverage cheaper financing for growth.

Cryptocurrencies could also benefit from the low cost of borrowing, weaker USD and institutional interest.

Here are three crypto related stock recommendations.

 1. Coinbase (COIN): As a leading cryptocurrency exchange, Coinbase benefits from increased trading volumes when interest in cryptocurrencies rises. Lower borrowing costs might encourage more trading activity, boosting the company’s earnings.

2. MicroStrategy (MSTR): MicroStrategy holds significant amounts of Bitcoin on its balance sheet. A rise in Bitcoin’s value due to increased interest following the rate cut could lead to an appreciation in MicroStrategy’s stock price .

3. Riot Platforms (RIOT): This Bitcoin mining company can benefit as the value of Bitcoin increases, improving the profitability of mining operations. Lower energy costs and borrowing expenses can also enhance margins, positively impacting the stock .

In conclusion, the Fed’s interest rate cut could indirectly boost the performance of cryptocurrency-related assets and stocks as investors seek riskier, higher-return investments amidst a low-rate environment.

50 bps! Ready to Embrace Rally or Sell the News?
On September 18, 2024, the Fed cut rates by 50 basis points to 4.75%-5%. This is the first cut since March 2022. The Fed forecasts a total of 100 basis points in cuts for 2024 and another 100 basis points in 2025. The Dow Jones and S&P 500 both hit record highs during the trading session but soon gave back some gains. All three major indices turned negative, with the Dow down 0.25%, the Nasdaq down 0.31%, and the S&P 500 down 0.29%. ---------------- Will 50bps continue to boost market higher or time to sell the fact?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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