Since bottoming in late Oct. 2023, markets bid stocks higher by setting up a steep rate cut pivot for 2024. This morning’s stocks to watch is a continuation of the impending rate-cut setup. Markets are more than willing to pay a premium on the bet that stock prices will keep rising in 2024.
The slowing inflation will ensure a rate cut. To take advantage of an eventual rebound in package shipping, FedEx (FDX) announced a $1 billion stock buyback on Dec. 26. FDX stock will make another run back to the pre-selloff price at $281.
In the shipping sector, Maersk’s shipping resumption in the Red Sea will hurt shipping day rates. ZIM Shipping (ZIM) risks falling as bears hold onto their 24.67% short interest against the Israeli-based firm.
Up sharply in 2023, Redfin (RDFN) recently broke out of its 200-day simple moving average of $9.24. The short float of 18% could lead to a squeeze. Lower interest rates increase home affordability. This would help homebuilder Lennar (LEN), Opendoor (OPEN), a real estate service, and lenders like Rocket Companies (RKT).
Expect the absence of doom and gloom in the media. The stock market has no negative news or higher interest rates to worry about.
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