What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
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:
- Water Infrastructure company Energy Recovery (NASDAQ: ERII) jumped 3.5%. Is now the time to buy Energy Recovery? Access our full analysis report here, it’s free.
- Ground Transportation company Ryder (NYSE: R) jumped 3.6%. Is now the time to buy Ryder? Access our full analysis report here, it’s free.
- Gas and Liquid Handling company IDEX (NYSE: IEX) jumped 3.7%. Is now the time to buy IDEX? Access our full analysis report here, it’s free.
- Marine Transportation company Pangaea (NASDAQ: PANL) jumped 4.2%. Is now the time to buy Pangaea? Access our full analysis report here, it’s free.
- Agricultural Machinery company The Toro Company (NYSE: TTC) jumped 4.1%. Is now the time to buy The Toro Company? Access our full analysis report here, it’s free.
Zooming In On Pangaea (PANL)
Pangaea’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Pangaea is down 6.6% since the beginning of the year, and at $5.27 per share, it is trading 29% below its 52-week high of $7.42 from September 2024. Investors who bought $1,000 worth of Pangaea’s shares 5 years ago would now be looking at an investment worth $2,260.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
