🐄 Cash Cow Wrangling

Plus, Facebook's big secret: "Project Ghostbusters"

Happy Wednesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

  • 🟩 | US stocks rose on Wednesday. The S&P 500 rose 1% today, snapping its three-day loss streak. The Dow gained 477 points, and the Nasdaq Composite rose over half a percent. All three major indexes are on pace to end the trading month and quarter in the green.

  • 📈 | One Notable Gainer: Shares of Merck surged 5% on news that the FDA approved its new drug, Winrevair, for treating life-threatening lung conditions.

  • 📉 | One Notable Decliner: GameStop shed 15% after the video game retailer reported fourth-quarter results that showed significant underperformance in its software segment. The segment generated $465 million versus the estimated $670 million.

  • 🐄 | Tomorrow's Trade: Cash Cow Wrangling. Scroll down for more.

Plus, today’s partner outlined 10 easy ways to get money without getting a job.

S&P 500 Heatmap. Credit: Finviz

All stocks on US exchanges. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

CTAS (+8%) Workplace equipment and cleaning supplies provider Cintas saw its shares pop after beating Q4 forecasts and hoisting its guidance (IBD)

HOOD (+4%) Robinhood announced its new credit card with high cash-back rewards that can be deposited into a customer’s brokerage account (TC)

GE (+4%) Shares of General Electric rose after Wells Fargo analyst Matthew Akers upgraded the stock’s price target from $177 to $200 (YF)

RDDT (-11%) Reddit stock is under pressure after a bearish report from Hedgeye. The research firm identified Reddit as a short idea (YF)

DJT (+14%) Shares of Trump Media & Technology Group shot up again, boosting Trump’s net worth to $6.4 billion (Barron’s)

TOGETHER WITH FINANCE BUZZ

Having a little bit of extra cash padding feels good … secure … and safe.

But finding ways to get extra cash (that are actually worth your time) can be challenging. That’s why we came up with a curated list of the best side hustles you can do right now — that still work in 2024!

OVERHEARD ON THE STREET

CNBC: Amazon spent $2.75 billion backing AI startup Anthropic in its largest venture investment yet. Anthropic is regarded as the generative AI front-runner.

YF: US homebuyers need to make $114,000 a year to afford a median-priced home, 35% more than the median US household income.

BI: Goldman Sachs says stocks could surge another 15% this year with mega-cap tech leaders nowhere near bubble peaks.

CNBC: A US judge ruled that the SEC's claim that CoinBase failed to register as a securities business can be heard by a jury, a “big win” in the SEC’s lawsuit.

TC: New documents show Facebook snooped on users’ Snapchat traffic during a secret project entitled “Project Ghostbusters.”

TOMORROW’S TRADE IDEA, TODAY

Cow Appreciation Day GIF

Small-Cap Revival

As the Fed continues to send signals of an impending rate cut, many experts are becoming more bullish on small-cap stocks. 

Historically, these types of stocks are more interest-rate sensitive than large or mid caps, since small caps tend to utilize bank loans to finance operations. A rate cut could give them a significant boost.

As a result, CNBC analysts are predicting that the iShares Russell 2000 ETF (IWM) may finally breakout from its resistance level.

Breakout Doesn’t Mean Buy

This doesn’t necessarily mean that analysts think it's a good time to buy the fund. According to CNBC, 43% of the stocks making up the Russell have a negative trailing 12-month EPS, and 8.36% have a debt-to-asset ratio over 60%. 

When compared with the S&P’s figures of 6% and 1.79%, respectively, small caps aren’t looking too attractive. 

CNBC says there’s another way to play a small-cap success story.

Cash Cows

According to analysts, there’s one small-cap ETF that could provide value to investors: the Pacer US Small Cap Cash Cows 100 ETF (CALF). This fund consists of small caps with the highest free cash flow yields. 

CALF recently broke through its two-year resistance level and is expected to continue its climb. Since its inception, its returns have equaled the S&P and significantly outperformed the Russell 2000 ETF. 

It’s no secret that small-caps benefit from lower interest rates. But according to CNBC, that doesn’t mean they will all benefit equally. The companies with the most free cash flow could provide investors with the most value if the Fed decides to pivot.

Which ETF do you think will outperform over the next 12 months?

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TOGETHER WITH FINANCE BUZZ

Having a little bit of extra cash padding feels good … secure … and safe.

But finding ways to get extra cash (that are actually worth your time) can be challenging. That’s why we came up with a curated list of the best side hustles you can do right now — that still work in 2024!

ON OUR RADAR

House.gov: The Shrinkflation Prevention Act was introduced to Congress and would prohibit corporations from decreasing product size without lowering prices.

Axios: The U.S. hit an all-time low ranking in the annual World Happiness Report, tumbling eight spots to 23rd.

BI: Nearly half of US managers surveyed by BeautifulAI worry that AI tools will lower their wages.

BI: AI pessimism is worse among workers… A new survey from Checkr showed that 79% of US workers are worried that adopting AI will result in pay cuts.

Resume Builder: 15% of Gen Zers have received a job offer for an opportunity they found on TikTok.

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