While we’re eagerly waiting for an interest rate cut, one must remember that there is no certainty when it comes to government decisions. Several factors come into play, and the policymakers will not announce a rate cut until they are certain about the inflation level. If a rate cut happens, the economy will improve and we could see higher consumer spending. It will certainly benefit investors in multiple ways but if there is no rate cut, how do you pick stocks to buy then?
If you want to rebalance your investment portfolio and prepare yourself for the best and the worst that could happen, pick stocks that can thrive even in a high-interest environment. These companies have a global presence and will continue to see growth despite high interest rates. Remember, they’ll do even better if a cut is announced but they can also thrive without one. Here are three stocks to buy if an interest rate cut is not announced this year.
Amazon (AMZN)
E-commerce giant Amazon (NASDAQ:AMZN) has come a long way from its humble beginnings as a bookseller. The company is not restricted to the e-commerce business, but has a strong presence across multiple industries. A household name today, Amazon makes the majority of its revenue from the cloud computing business, Amazon Web Services (AWS), and advertising.
The company recently had a Prime Day and boosted sales of $14.2 billion across the U.S. in only 48 hours. Through this two-day sales event, Amazon turns a slow retail period into a record sales period, with online sales growing by 11% on the two days. I believe Amazon will report another stellar quarter and see the stock surge.
For the second quarter, the management is aiming for net sales in the range of $144 and $149 billion and an operating income between $10 to $14 billion. Rate cut or not, Amazon will continue thriving in the industry even if consumer spending is low. However, looking at the Prime Day sales numbers, I can safely say that consumer spending has significantly improved. It is one of the best stocks to buy.
Up 21% year-to-date, Amazon stock is trading for $182 and it is one of the top tech stocks to own. Buying the stock below $200 can be a very smart move. Wells Fargo analysts believe that Amazon is the “most favored long among mega-caps” as tech companies start reporting earnings. The analyst expects an 18% rise in AWS revenue for the quarter.
My InvestorPlace colleague Joel Baglole considers the stock a buy before its earnings.
Novo Nordisk (NVO)
Pharmaceutical company Novo Nordisk (NYSE:NVO) is on a roll this year. Driven by the growing demand for the obesity drug, Ozempic and Wegovy, the company has seen impressive revenue growth, and this has led the stock to rally.
Up 30% YTD, NVO stock is exchanging hands for $133 and I believe it is one of the best pharma stocks to own. People may cut down on discretionary spending but will continue to budget for essential drugs.
The company has generated billions from the sale of weight loss drugs and given the massive market, it could continue generating strong revenue over the decade. Even if we maintain a conservative approach to the weight loss drug market, Novo Nordisk could be a winner. Aiming for $100 billion in annual sales is no small number and could put the company at the top of the industry.
Its financials are equally impressive with a 28% jump in net profit to $3.65 billion where the sales of Wegovy more than doubled. The management has raised its outlook for the year and is aiming for sales growth between 19% to 27% and an operating income growth of 30%. Despite competition in the industry, Novo Nordisk remains one of the best industry players with ample room to run.
Visa (V)
Fintech company Visa (NYSE:V) is a legacy player with a global presence and caters to millions of merchants. With over 4 billion cards in circulation, Visa makes money every time you swipe the card and make a purchase. This allows the company to keep operating costs low while ensuring steady revenue growth.
A rate cut could benefit the company as consumer spending can improve but even if there is no rate cut, Visa will keep winning. It managed to thrive even in high inflationary periods and has reported impressive fundamentals. In the second quarter, it saw a 10% net revenue jump and an 11% jump in processed transactions.
Despite the market volatility, Visa is a safe stock that steadily moves upwards. It is up 3% YTD and is exchanging hands for $267. The company dominates the payment industry and despite competition, it remains at the top. In terms of financial health, the company is strong and has the flexibility to increase dividends. It offers a dividend yield of 0.78%.
All of us own at least one card, and Visa is one of the top four card issuers, making it the biggest beneficiary of the transition from cash to digital payments.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.