The United States Federal Reserve is gearing up for its second straight day of meetings on Wednesday, July 31. It is expected to reveal its rate decision on the same day. Oddsmakers are all but certain that the central bank will make a rate cut. Tech stocks have broadly performed well in 2019, but there appears to be some anxious movement ahead of the rate decision.
Facebook (NASDAQ:FB) stock has climbed 50% in 2019 as of close on July 30. The stock is only up 1.8% over the past three months. The launch of Facebook’s cryptocurrency, Libra, caught the attention of Fed chairman Jerome Powell this month. Bitcoin and other cryptos have soared in 2019 in the face of easing monetary policy, a long with traditional safe havens like gold and silver. Facebook’s Libra could benefit from the same trends.
Apple (NASDAQ:AAPL) stock has climbed 33% in 2019 so far. Shares are up 4.4% over the past three months. The U.S. Tax Cuts and Jobs Act enabled Apple to gorge on record stock buybacks. A soft rate environment has been great for investment over the past decade. If the Fed moves forward on a rate cut, I like Apple to challenge its 52-week highs in the final months of this year.
Bank stocks may be the safer bet in the event of a rate cut, but investors should not sleep on tech giants as we move into August.
