9 Stocks on My Radar as We Brace for Rate Cuts
My strategy here is to avoid shorting this dull market, as small caps are leading and the Fed likely prepares to cut rates at the next four meetings.
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The August consumer price index report was slightly hotter than expected but not enough to matter. Weekly unemployment claims were higher than expected and confirm the weakness in the jobs market, which has become a major issue. The market is now expecting four-straight interest-rate cuts of a quarter-point through January, starting with the meeting next week.
The market action following the news was slow and dull, but after it became evident that there was no "sell the news" reaction to the economic news, the buyers stepped up and that is creating some fear of missing out. Breadth is quite good with around 70% of stocks in positive territory, but there is rather short list of stocks at new 12-month highs, although the indexes are trading at new high levels. This is evidence of some narrowness in the action.
Small caps IWM are celebrating the confirmation of a dovish Fed. Smaller stocks tend to carry more debt and are more sensitive to interest rates than their big-cap cousins. The Russell 2000 IWM is now at a new closing high for 2025.
I’m heavily invested with cash levels quite low, but I’m finding it very difficult to put more money to work. The stocks I’m holding are acting quite well, but I am not finding a lot of compelling entry points for additional buys.
Some names that I’m holding that have attractive charts are Rocket Companies RKT, OptimizeRX OPRX, EOS Energy EOSE, Ondas Holdings ONDS, CorMedix CRMD, and Electovaya (ELVA).
Big-cap name Uber Technologies UBER is developing well after a couple of dips under its 50-day simple moving average. It could use better volume, but it is in a position to challenge breakout levels around $98.
Harrow HROW remains a top play going into third-quarter earnings. It is consolidating very nicely near highs and may need a little more time before it can gain better momentum.
Emergent BioSolutions EBS popped on Tuesday on contract news and has good fundamentals but it trades very thinly. Support is around the $7.70 area and I’m looking to build my position if it drifts lower.
Those are a few things on my radar but I’m not feeling like an aggressive buyer right. Price action is good but I’m not confident that upside momentum can be sustained.
At the time of publication, DePorre was long RKT, OPRX, EOSE, ONDS, CRMD, ELVA, UBER, HROW, EBS.
