What Happened?
A number of stocks jumped in the afternoon session after markets continued to rally amid growing speculation of an impending interest rate cut by the Federal Reserve. Following a favorable Consumer Price Index (CPI) report, investors are increasingly betting on a rate reduction next month, a sentiment amplified by U.S. Treasury Secretary Scott Bessent's call for a significant cut. This has fueled a 'risk-on' environment across Wall Street. Lower interest rates are typically beneficial for growth-oriented sectors like healthcare, as they reduce the cost of borrowing for research and innovation and increase the present value of future earnings.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Research Tools & Consumables company Avantor (NYSE: AVTR) jumped 3%. Is now the time to buy Avantor? Access our full analysis report here, it’s free.
- Generic Pharmaceuticals company Viatris (NASDAQ: VTRS) jumped 3.1%. Is now the time to buy Viatris? Access our full analysis report here, it’s free.
- Generic Pharmaceuticals company Amneal (NASDAQ: AMRX) jumped 3.2%. Is now the time to buy Amneal? Access our full analysis report here, it’s free.
Zooming In On Amneal (AMRX)
Amneal’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Amneal is up 21.6% since the beginning of the year, and at $9.44 per share, has set a new 52-week high. Investors who bought $1,000 worth of Amneal’s shares 5 years ago would now be looking at an investment worth $2,211.
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