2 Stocks That Could Rocket on a Fed Rate Cut

Core Viewpoint - Markets are anticipating the Federal Reserve to cut rates before the end of the year, which is typically bullish for equities as it stimulates corporate activity and consumer demand [1] Group 1: Real Estate Sector Impact - Real estate is expected to benefit significantly from lower mortgage rates, which will attract buyers back into the housing market and accelerate commercial leasing activity [2] - Zillow Group is highlighted as a strong candidate for benefiting from rate cuts, having seen a 40% increase in stock price since April [2][3] - CoStar Group, operating in the commercial property market, is also well-positioned to benefit from a rate-cut environment, although its stock has rallied less aggressively compared to Zillow [6][7] Group 2: Company Performance and Analyst Ratings - Zillow Group has shown strong performance despite issuing softer forward guidance, with analysts from Evercore ISI and KeyCorp maintaining Overweight ratings and setting price targets as high as $95, indicating nearly 20% upside potential [4][5] - CoStar Group has consistently topped analyst expectations and has received an Outperform rating from Wolfe Research with a price target of $105, suggesting about 15% upside from current levels [8][9] Group 3: Market Outlook and Expectations - There is high market confidence in a rate cut occurring soon, with indications that labor markets are cooling and price pressures are easing, making a modest rate cut widely anticipated [10] - For real estate-linked stocks like Zillow and CoStar, lower borrowing costs are expected to reignite housing and commercial activity, enhancing investor appetite for rate-sensitive sectors [11]