The fact that US interest rates are now being tightened can provide good buying opportunities for growth stocks, and some stocks stand out in particular, Wells Fargo believes.
The US central bank Fed increased the key interest rate by 75 basis points on Wednesday, as the second interest rate hike in a row. This comes in tandem with sky-high US inflation. Going forward, Wells Fargo believes that the interest rate will be about 1 percent higher in November. They believe this could lead to a rebound for growth stocks that have fallen a lot.
– We believe that growth stocks will do well in a market situation with slightly lower inflation and weaker economic development, writes analyst Chris Harvey at Wells Fargo according to CNBC.
Likes losers
Several of the companies in which the bank has faith have been stock market winners so far this year. Companies such as Meta and Netflix have fallen 53 and 62 percent respectively so far this year, and Wells Fargo believes the trend is about to reverse.
Harvey singles out the following growth stocks as good buy candidates:
Harvey points out that these stocks have more consistent and better earnings and cash flow than similar companies.
– When economic growth slows down, investors are likely to want stability, and we believe that this characterizes the stocks in our list, concludes Harvey.
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