4 Discretionary Stocks to Buy on Rising Hopes of a September Rate Cut

Wall Street has been on a rally over the past two months, as investors held their nerves and ignored concerns over the Federal Reserve’s plans with its monetary policy and the impact of tariffs on the economy.However, concerns over the next rate cut eased last week after Federal Reserve Chairman Jerome Powell hinted at easing the monetary policy next month. This fueled the ongoing rally, as investors finally breathed a sigh of relief.Given the optimism surrounding rate cuts, investing in consumer discretionary stocks would be a wise decision.Five such stocks are: Boyd Gaming Corporation BYD, Carnival Corporation & plc CCL, The Walt Disney Company DIS, Netflix, Inc. NFLX and Ralph Lauren Corporation RL. These stocks currently have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure good returns. You can see the complete list of today’s Zacks #1 Rank stocks here.Rate Cut Hopes RisePowell, for the first time in months, hinted at a rate cut in September during the central bank’s annual conclave in Jackson Hole, WY. The Fed Chair said, “The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”He added: “the balance of risks appears to be shifting” between the Federal Reserve’s two goals of optimum employment and price stability. Powell’s comments sent stocks on a rally, with the Dow hitting an all-time closing high of 45,631.74 points.Investors are expecting a 25-basis-point interest rate cut in September. The Federal Reserve has left interest rates unchanged since December in the current range of 4.25-4.5%. Expectations of a rate cut started rising earlier this month after data showed inflation grew at a pace slower than expected.The consumer price index (CPI) increased 0.2% sequentially in July, lower than the consensus estimate of a rise of 0.3% and May’s rise of 0.3%. Year over year, CPI rose 2.7% in July, which also came in lower than the consensus estimate of a rise of 2.8%. Markets are now pricing in a 90% chance of a quarter percentage point rate cut in September, up from 75% before Powell’s speech, according to the CME Group’s FedWatch Tool.5 Discretionary Stocks With UpsideBoyd Gaming Corporation Boyd Gaming Corporation is a multi-jurisdictional gaming company. BYD owns and operates gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania. Boyd Gaming Corporation’s expected earnings growth rate for the current year is 5.2%. The Zacks Consensus Estimate for current-year earnings improved 6.5% over the last 60 days. BYD presently sports a Zacks Rank #1.Carnival Corporation & plcCarnival Corporation & plc operates as a cruise and vacation company. As a single economic entity, CCL forms the largest cruise operator in the world. Carnival Corporation & plcis the world’s leading leisure travel firm and carries nearly half of the global cruise guests.Carnival Corporation’s expected earnings growth rate for the current year is 40.9%. The Zacks Consensus Estimate for current-year earnings improved 6.4% over the last 60 days. CCL currently carries a Zacks Rank #2.The Walt Disney CompanyThe Walt Disney Company has assets that span movies, television shows and theme parks. Revenues were $91.4 billion in fiscal 2024. DIS’ fourth-quarter fiscal 2024 results reflect growth in Disney+ subscribers and Media and Entertainment Distribution businesses. Domestic theme park and resort businesses gained due to guest spending growth attributable to increases in per capita guest spending at theme parks and cruise lines.The Walt Disney Company’s expected earnings growth rate for the current year is 17.7%. The Zacks Consensus Estimate for current-year earnings improved 1.4% over the last 60 days. DIS presently has a Zacks Rank #2.Netflix, Inc.Netflix, Inc. is considered a pioneer in the streaming space. NFLX has been spending aggressively on building its portfolio of original shows. This is helping Netflix sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon Prime Video.Netflix’s expected earnings growth rate for the current year is 31.4%. The Zacks Consensus Estimate for the current-year earnings has improved 2.9% over the past 60 days. NFLX currently has a Zacks Rank #2.Ralph Lauren CorporationRalph Lauren Corporation is a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia and internationally. RL offers products in apparel, footwear, accessories, home furnishings, and other licensed product categories.Ralph Lauren’s expected earnings growth rate for the current year is 19.8%. The Zacks Consensus Estimate for the current-year earnings has improved 8% over the past 60 days. RL currently carries a Zacks Rank #2.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Carnival Corporation (CCL): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report Ralph Lauren Corporation (RL): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report Boyd Gaming Corporation (BYD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks