US stocks were mixed on Wednesday as investors digested the possibility of the Federal Reserve cutting interest rates sooner than anticipated and updated data showed the US economy grew faster than previously reported in the third quarter. The stock market rally includes meme stocks and beaten-down areas like cryptocurrency-related stocks. Traders are driven by the expectation of rate cuts and a fear of missing out on quick profits in risk assets.
The US economy grew at a 5.2% annualized pace in Q3, with consumer spending rising at a 3.6% annual rate. General Motors announced a $10 billion stock buyback plan and a dividend increase. Cigna is in merger talks with Humana, potentially creating a rival to UnitedHealth Group and CVS Health. Robert Kiyosaki expressed concerns about the US' financial health, while Charlie Munger passed away at age 99.
QuantumScape is challenging Tesla's dominance in the EV battery market with its solid-state batteries. Salesforce reported quarterly earnings per share ahead of projections, causing its stock to rise. Ryan Reynolds, actor and investor, dropped out of college but went on to sell two businesses for nearly $2 billion. Shares of banks and other financial institutions were flat as traders hedged their bets on the sustainability of the fourth-quarter rally in stocks and bonds. The opening weeks of 2024 are among the weakest for global stock markets in recent years, as central bankers push back on market expectations for a series of rate cuts this year. The discount stock-trading app Robinhood has agreed to pay $7.5 million and make substantial changes to its operations to settle allegations that Massachusetts regulators brought against the firm for what it called "gamification" of its customer interface.
CarGurus, a leading online automotive marketplace, is expected to experience a potential bull run in the vehicle market due to increased demand in the used car market. The company has seen significant growth in net income and earnings per share over the past year. Analysts predict further growth in earnings per share in the next twelve months. Wall Street investors, including Point72, UBS Group, and Barclays, have increased their stakes in CarGurus and raised their price targets for the stock. Despite trading at a premium compared to its peers, CarGurus is expected to continue its rally.
Crocs, a footwear company known for its iconic clogs, continues to set new quarterly revenue records and sustain unparalleled profitability. The macro environment is improving for Crocs, as rising real wages across the developed world are likely to boost discretionary spending. The stock is almost 40% undervalued according to valuation analysis. The upcoming quarterly earnings release is scheduled for August 6, with positive consensus sentiment. The stock has rallied by 66% year-to-date and is still attractively valued. The business's fair value is estimated to be $13.3 billion, almost 40% higher than the current market cap. Analysts still consider the stock a 'Strong Buy'. [01e856c7]