Earlier this week, the Department of Justice accused Visa (V) of a monopoly in the debit card market. After markets closed on Thursday, the firm deposited $1.5 billion into its litigation escrow account. This would have the same effect on EPS as buying back class A shares.
V stock fell below $270 before closing at $271.69. Markets may dismiss the DOJ case and send V stock back to the $289 level.
Trade luxury stocks today. LVMH (LVMHF) soared by 10.92% yesterday on a relief rally. Markets are betting that LV stock is oversold. Similarly, Elf Beauty (ELF) and Ulta Beauty (ULTA) are both due for a rebound.
In the automotive sector, investors bought Mercedes-Benz (MBGAF) and BMW (BMWYY) stock. They are speculating that China introduced enough fiscal stimulus and interest rate cuts to encourage consumers to spend again.
Among the auto stocks, Tesla (TSLA) is the strongest company. The stock is on an unbreakable uptrend that started in August. Shareholders are bullish on Tesla’s robo-taxi prospects. They are also betting that Tesla may manage through the problem of falling gross margins and lower average selling prices.
Investors should be wary of Rivian (RIVN). The stock peaked at over $18 in July but has fallen steadily since then. After closing at $11.17, short-sellers are in control. They hold a 16% short float against the stock.
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