2024-03-24 18:55:03 ET
The U.S. Federal Reserve left rates unchanged last week but signalled three cuts coming later this year. Here are the three stocks that could potentially benefit the most when the central bank does deliver on its promise of lowering rates in 2024.
Amazon.com Inc (NASDAQ: AMZN)
Amazon generally does amazingly well in terms of demand and this year is not going to be any different.
But the margin side of its story is not particularly impressive – and that’s where the rate cuts may help the eCommerce giant.
Investing in operations will turn much less expensive for Amazon once the Federal Reserve starts to lower interest rates. So, a monetary policy shift can be expected to make it easier for the tech titan to execute its plans of launching an AI model and expanding its footprint in online streaming.
Plus, rate cuts are typically a positive for spending at large – which may deliver a boost to the growth rate of .
Rivian Automotive Inc (NASDAQ: RIVN)
EV stocks have been out of favour in recent months on fears of a demand slowdown.
But many believe that Rivian has what it takes to bring real competition to the industry leader – Tesla Inc.
Watch here: https://www.youtube.com/embed/04vWKpIYsXw?feature=oembedThe Irvine-headquartered firm stands a better chance of successfully navigating the industry slump and, therefore, may benefit materially once the central bank announces its first rate cut and helps boost the sentiment towards growth stocks.
did also announce a job cut last month ( read more ) – so it’s committed to minimising costs and is currently trading at a super attractive valuation.
Home Depot Inc (NYSE: HD)
Home Depot has been in a sharp uptrend since late October but it can extend its rally further on the back of lower interest rates.
That’s because rate cuts will make it easier for the U.S. consumer to borrow money for expensive home repairs.
Many of them may have opted to postpone such projects in 2023 due to higher interest rates. So, a bit of pent-up demand is not really out of question either. Note that the home improvement retailer did forecast 2023 “to be a year of moderation in demand for home improvement”.
does also pay a dividend yield of 2.31% which makes it an even better pick to play the expected rate cuts this year.
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