Influenced by hotter-than-expected inflation and employment data for September, the Fed will most likely announce another aggressive rate hike in its meeting next week, raising recession odds. Goldman Sachs believes there is a 35% chance of a recession in the next 12 months.
However, despite lingering macro headwinds, the stock market witnessed a relief rally since mid-October, with initial corporate earnings beats boosting investor sentiment. The S&P 500 gained close to 7% over this period.
Earlier this week, Morgan Stanley's equity strategist Mike Wilson said that the stock market could see a 13% rally in the near term. However, we believe the S&P 500 needs to trade above its 200-day moving average to find strong support.
Investors doubt the market's continued rally following disappointing big tech earnings, but one could take advantage of the strong uptrend in O'Reilly Automotive, Inc. (ORLY) and Poshmark, Inc. (POSH) by watching them closely.
O'Reilly Automotive, Inc. (ORLY)
ORLY and its subsidiaries operate as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. It has a market capitalization of $49.12 billion.
Over the last three years, ORLY has grown its revenue at an 11.9% CAGR, while the company's EBITDA has grown at a 15.2% CAGR.
For the second quarter ended June 30, 2022, ORLY’s sales came in at $3.67 billion, up 5.9% year-over-year. Its gross profit increased 3.2% year-over-year to $1.88 billion. In addition, its operating income increased marginally year-over-year to $798.55 million. Continue reading "2 Strong Stocks to Add to Your Watchlist in Q4"