The US stock market has remained resilient since the Federal Reserve decided to lower its key rate by another 25 basis point on Thursday.
According to the statement made after the meeting:
The Committee believes that the risks associated with achieving its inflation and employment goals are roughly balanced.
Lower interest rates have generally been viewed as positive for the stock market. Here are three stocks which are particularly attractive, as the US central banks continues to reduce its benchmark overnight borrowing rates:
AbbVie Inc (NYSE: ABBV)
AbbVie, a pharmaceutical giant, could benefit from lower rates of interest as it needs easy access to cash in order to fund its product pipeline. Rate cuts make borrowing money cheaper.
The New York-listed company recently reported better than expected financial results for its third-quarter and raised its guidance to the full year, making it even more attractive to own by 2025.
The company, based in North Carolina, Chicago, is also well-positioned to generate healthy total returns, as it pays a current dividend yield of 3.27 percent.
Analysts at Cantor-Fitzgerald raised their price target for AbbVie to $240 in the last week, which indicates a potential 20% increase from here.
Chevron Corp (NYSE: CVX)
The US Federal Reserve has cut interest rates to stimulate economic growth, which tends to increase energy demand.
Investors should buy Chevron stock amid rate cuts, as they could help improve the oil and gas giant’s profitability in the months to come.
CVX may also be able to fund new projects with lower borrowing costs, allowing it to unlock the next wave in growth. A 4.15% dividend yield is another reason to own Chevron.
The energy company’s shares are worth buying because of the Hess acquisition, which its management expects to close in the second half of next year. This will likely increase production and scale operations.
Elf Beauty Inc. (NYSE: ELF).
Elf Beauty is a good example of a high-growth brand that has experienced accelerated growth due to rate cuts.
The beauty company’s shares and market share have grown for 22 consecutive quarters.
Plus, lower interest rate tends to increase consumer spending on discretionary items such as beauty products, which ELF deals with primarily.
Elf stock is attractive because it has reported its financial results this week, which were well above Street expectations.
Elf does not pay dividends at the time of writing, and is therefore not a good choice for income investors.
This post Top 3 Stocks to Buy After Fed’s 25 Basis Point Rate Cut may be modified as new developments unfold.
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