Investors eye rate cuts amid stock market highs, but recession fears loom

From Nasdaq
July 16, 2024 01:29:04 PM:

Investors are hopeful for interest rate cuts from the Federal Reserve amid a soaring stock market, but history shows that rate cuts can precede recessions. If GDP underperforms, a recession could be possible, causing European investors to doubt the rally’s longevity.

ThredUp (TDUP) is an online apparel resale platform that has shown resilience in a challenging economic environment. With a reported first-quarter revenue of $79.6 million and a growing user base, the company is well-positioned to benefit from the consumer trend towards secondhand goods.

McDonald’s (MCD) recently launched an affordable $5 meal deal to attract budget-conscious consumers amidst a price war in the industry. Despite a stock pullback, McDonald’s has historically performed well in economic downturns, making it a potentially sturdy investment option if a recession occurs.

Coinbase (COIN), the leading U.S. cryptocurrency exchange, has seen its stock soar 181% in the past year due to the crypto market’s recovery. However, with decreasing trading volumes, ongoing legal challenges, and insiders selling significant amounts of shares, it may not be the best time to invest in Coinbase.

Robinhood (HOOD), an online brokerage platform, has experienced explosive growth fueled by a surging stock and crypto market. Despite reporting record revenues in Q1 2024, the platform faces regulatory risks, relies heavily on controversial revenue sources, and may be too exposed to market fluctuations, making it a risky investment, especially in a potential recession.

Read more at Nasdaq: 2 Stocks to Buy When the Market Crashes (and 2 to Avoid)