Biggest Rate Cut in 16 Years: 4 Consumer Discretionary Stocks to Buy

Economic Overview - The Federal Reserve cut interest rates by 50 basis points, marking its first rate cut since March 2020 and the largest in over 16 years [1] - The benchmark policy rate now ranges between 4.75% and 5.00%, the lowest level since April 2023 [5] - The Fed's dot-plot indicates a projected Fed funds rate of 4.25-4.50% by year-end, with further reductions expected in 2025 and 2026 [6] Consumer Discretionary Sector - A 50-basis point rate cut is expected to boost the broader economy, particularly benefiting growth stocks and consumer discretionary stocks [2][7] - The U.S. economy is growing at a solid pace, with GDP growth of 3% in the second quarter and an upward revision of the third-quarter GDP growth estimate to 3% [8] Investment Opportunities - Four consumer discretionary stocks identified with upside potential for 2024 include: - Traeger, Inc. (COOK): Expected earnings growth rate over 100% for the current year, Zacks Rank 2, Growth Score A [9] - Lincoln Educational Services Corporation (LINC): Expected earnings growth rate of 4.1%, Zacks Rank 2, Growth Score A [12] - Reynolds Consumer Products Inc. (REYN): Expected earnings growth rate of 19%, Zacks Rank 2, Growth Score B [14] - Royal Caribbean Cruises Ltd. (RCL): Expected earnings growth rate of 71.2%, Zacks Rank 2, Growth Score A [17]