What Happened?
A number of stocks jumped in the morning session after markets continued to rally amid growing investor optimism for a Federal Reserve interest rate cut in September. This optimism was spurred by a recent Consumer Price Index (CPI) report that did not show runaway inflation, increasing the perceived probability of a rate cut to over 90%. Lower interest rates are generally seen as a positive for the economy as they reduce borrowing costs for consumers, which can stimulate spending on non-essential goods. Consequently, investors bid up shares in the apparel, home furnishings, and automotive retail industries in anticipation of stronger consumer demand.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Specialty Retail company Leslie's (NASDAQ: LESL) jumped 3.6%. Is now the time to buy Leslie's? Access our full analysis report here, it’s free.
- Boat & Marine Retailer company MarineMax (NYSE: HZO) jumped 4.4%. Is now the time to buy MarineMax? Access our full analysis report here, it’s free.
- Specialty Retail company National Vision (NASDAQ: EYE) jumped 3.3%. Is now the time to buy National Vision? Access our full analysis report here, it’s free.
- Beauty and Cosmetics Retailer company Sally Beauty (NYSE: SBH) jumped 7.5%. Is now the time to buy Sally Beauty? Access our full analysis report here, it’s free.
- Home Improvement Retailer company Lowe's (NYSE: LOW) jumped 5.2%. Is now the time to buy Lowe's? Access our full analysis report here, it’s free.
Zooming In On Sally Beauty (SBH)
Sally Beauty’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Sally Beauty is up 31.1% since the beginning of the year, and at $14 per share, it is trading close to its 52-week high of $14.22 from November 2024. Investors who bought $1,000 worth of Sally Beauty’s shares 5 years ago would now be looking at an investment worth $1,084.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
