Fed's Emergency Rate Cut A Boon For These 5 Stocks
Zacks Investment Research | Mar 04, 2020 06:25AM ET
In a rare inter-meeting move, the Fed announced an emergency rate cut on Mar 3. The central bank trimmed its fed funds target rate by half a percentage point to a range of 1-1.25%. In fact, the last time the Fed cut rates on an emergency basis was in the December 2008 financial crisis.
The rate cut aims at thwarting the coronavirus threat to the economy. After all, worries over how the outbreak will impact corporate profit margins and global economy have been roiling the U.S. stock market of late.
Several well-known companies like Apple (NASDAQ:AAPL), Nike (NYSE:NKE), United Airlines and Mastercard (NYSE:MA) raised concerns about their upcoming earnings and revenue results. They are worried that the outbreak will dent demand for goods and services. And since the impact is mostly in China, the virus will lead to both a demand and a supply shock for the global economy. After all, China is one of the world’s largest exporters and importers of goods.
Fed Chair Jerome Powell in the meantime said to officials that “we’ve come to the view now that it is time to act in support of the economy, and that our action will provide a meaningful boost to the economy.” The Fed’s decision, which was undivided, came after G-7 finance ministers as well as central bankers agreed to take a “coordinated effort” to curb the impact of the coronavirus.
In fact, Bank of Japan Governor Haruhiko Kuroda has already said that Japan will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases” (read more: Zacks Investment Research
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