Happy Sunday to everyone on The Street. 

"Signs that Americans are struggling to keep up with their bills are setting off alarms on Wall Street," Angel Au-Yeung writes for the Wall Street Journal in a somewhat alarming article published yesterday. "Shares of consumer-lending companies slid this past week after executives raised warnings about lower-income borrowers who are struggling to make payments. Dour remarks from banking executives at the Barclays banking conference rattled investors, who were already on edge about the health of the U.S. economy." Here are some facts and figures that stood out to me:

• The average [credit card interest] rate as of May was 21.51%, according to Fed data, up from around 15% in 2019.

• Around 9.1% of credit-card balances turned delinquent over the past year, the highest rate in over a decade, according to an August report from the Federal Reserve Bank of New York.

• Ally Financial Chief Financial Officer Russ Hutchinson said late payments and charge-offs on auto loans were higher than expected in July and August. (Ally’s shares fell 18% on Tuesday and have yet to recover.)

• Over the past year, roughly 8% of auto loans turned delinquent, according to the New York Fed, the highest rate in over a decade.

This goes back to the question we asked you yesterday. Should the Fed cut 25bps or 50bps in its upcoming meeting? Here's what you said:

🟩🟩🟩🟩🟩🟩 25bps

🟨🟨🟨🟨⬜️⬜️ 50bps

Let’s see what J Powell & Co. decides to do.

Before we dive in, today’s partner wants to help unlock America’s uranium potential. Click here to get access to a free special report today…

SPONSORED & WRITTEN AMERICAN URANIUM

Unlock America's Uranium Potential

Did you know that over 85% of the world's uranium production comes from just six countries?

As global energy demands rise and the U.S. seeks reliable domestic supply sources, the value of uranium is set to soar.

With increasing focus on clean energy and national security, uranium is emerging as a critical player in the future energy landscape. As supply tightens and demand grows, we could be on the brink of significant market movements.

Why Premier American Uranium (TSXV: PUR | OTCQB: PAUIF)?

Premier American Uranium is at the forefront of this dynamic market. With their bold expansion strategy, they are strategically positioned to lead in uranium production. Their extensive land holdings in key uranium-producing regions and their commitment to developing new sources make them a standout in the industry.

Don’t let this opportunity pass you by!

Click the link below to learn more and secure your place in this promising market.

Join the Uranium Revolution Today!

Bolting Up

Utilities Are Charging Higher

While everyone on the Street has been talking about AI, utilities have been quietly gliding up.

The sector is up about 19% year-to-date, slightly beating the S&P 500’s pace this year.

Bank of America believes there are more gains ahead, with equity strategist Savita Subramanian recently upgrading utilities from market weight to overweight.

Staying Afloat on Choppy Seas

The two main drivers for the upbeat note are the income and stability the sector provides.

Utilities tend to have higher dividend yields, and Subramanian says those payments become more attractive as rates fall. Dividends can also cushion a portfolio in times of market volatility. The analyst argued that the Federal Reserve’s rate-cutting strategy should increase swings in the market through next year.

Since the sector doesn’t bounce around as much as other areas of the market like tech during turbulent times, Subramanian expects investors to turn to utilities during the volatility. She observed that “quality and income are the new growth.”

No Dip on This Chip

Subramanian is also urging clients to steer clear of tech stocks for the time being.

The sector has hit a bit of a rough patch, sliding about 7% this quarter, but the bank has no interest in scooping up the dip. Subramanian points out that tech stocks are still expensive, saying “The sector trades at record EV/Sales.”

The utilities over tech stance isn’t shared by everyone. Some portfolio managers point to tech’s long-term outperformance and trends with artificial intelligence as reasons for investors to add tech stocks to their carts.

Store Brand Sweep

Buying Store Brands

Inflation might be cooling, but its effects on the American consumer are still being felt. These days shoppers are increasingly careful about what they buy and how much they spend.

According to financial institution Mizuho’s August survey, 36% of consumers polled said they plan to buy more store brand items over the next six months. This could be great news for stores that have invested substantial capital into their private brands, like Walmart (WMT) and TreeHouse Foods (THS).

TreeHouse Foods

The majority of analysts covering TreeHouse give it a hold rating, and average price targets actually suggest a 4% drop in its stock price. But according to John Baumgartner, this is largely due to grocery stores promoting national brands over store brands.

The company is working hard to improve its fundamentals, slashing costs and deleveraging. Additionally, it has been shedding low-growth and margin categories. Now, Baumgartner thinks it’s on a growth trajectory that rivals any in its history.

Walmart

Walmart launched its new brand, “bettergoods,” earlier this year. The brand focuses on providing trendy, plant-based and healthy options for shoppers. According to analysts, this is helping the store bring in more high-income consumers.

Analysts on the Street are bullish on the stock, with 86% giving WMT a buy or outperform rating. Shares are up about 47% YTD.

Americans are making adjustments to their shopping habits, and these stocks could be positioned to take advantage of shifting consumer trends.

Weathering the Steel Storm

Calmer Waters Ahead

The steel industry is notoriously volatile, but for investors willing to weather the storm, JPMorgan (JPM) analyst Bill Peterson identified two stocks he thinks have significant upside.

Peterson believes US Steel (X) and Nucor (NUE) will benefit from falling interest rates and an easing of election turbulence in 2025.

US Steel

The analyst raised his price target on iconic steelmaker US Steel to $42, a 35% upside from Tuesday’s closing price.

A recent report indicated that President Biden will block the company’s sale to Japanese company Nippon Steel (NPSCY). This will likely result in a drop in US Steel’s stock price. Peterson believes this could present a buying opportunity for investors.

Peterson also expects the company’s free cash flow to improve in 2025 as capital expenditures decrease, which could help fund a stock buyback program.

Nucor

Nucor is currently trading below its multi-year averages, which Peterson sees as another buying opportunity. He went as far as to say that the steel manufacturer offers the best product diversification of any company covered by JPMorgan.

Peterson expects that diversification will help Nucor protect earnings volatility through the next cycle as interest rate woes and election uncertainty storm through the steel industry.

For investors willing to weather some short term volatility, these stocks could pay off in the long run.

SPONSORED & WRITTEN AMERICAN URANIUM

Unlock America's Uranium Potential

Did you know that over 85% of the world's uranium production comes from just six countries?

As global energy demands rise and the U.S. seeks reliable domestic supply sources, the value of uranium is set to soar.

With increasing focus on clean energy and national security, uranium is emerging as a critical player in the future energy landscape. As supply tightens and demand grows, we could be on the brink of significant market movements.

Why Premier American Uranium (TSXV: PUR | OTCQB: PAUIF)?

Premier American Uranium is at the forefront of this dynamic market. With their bold expansion strategy, they are strategically positioned to lead in uranium production. Their extensive land holdings in key uranium-producing regions and their commitment to developing new sources make them a standout in the industry.

Don’t let this opportunity pass you by!

Click the link below to learn more and secure your place in this promising market.

Join the Uranium Revolution Today!

Last Week’s Poll Results

Are you bullish or bearish on Valvoline?

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨🟨🟨🟨⬜️⬜️ 🐻 Bearish

Are you bullish or bearish on Equinix (EQIX)?

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨🟨🟨🟨⬜️⬜️ 🐻 Bearish

Do you think the commercial battery trend still has room to run?

🟩🟩🟩🟩🟩🟩 👍Yes

🟨🟨🟨🟨⬜️⬜️ 👎No

This message is a paid advertisement for Premier American Uranium Inc. (TSXV: PUR | OTCQB: PAUIF). The Street Sheet (SS) receives a fee totaling up to $8 per lead. Other than the compensation received for this advertisement sent to subscribers, The Street Sheet and its principals are not affiliated with Premier American Uranium Inc. The Street Sheet and its principals do not own any of the stocks mentioned in this email or in the article that this email links to. The Street Sheet is a research service not owned or managed by registered brokers and therefore this site does not make any investment recommendations. The information provided in this newsletter is not guaranteed as to the accuracy or completeness. Each user of SS chooses to do trades at their sole discretion and risk. SS is not responsible for gains/losses that may result in the trading of these securities. This newsletter includes paid advertisements. The source of all third-party content in which SS receives some sort of compensation is clearly and prominently identified herein as "ad", "Sponsored", or “Together With”. Although we have sent you these advertisements, SS does not specifically endorse any third-party product nor is it responsible for the content, the accuracy, or the completeness of the advertisement or the experience with the third-party advertiser. Furthermore, we make no guarantee or warranty about what is in the advertisement. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. This communication from The Street Sheet is for informational purposes only. It is not intended to serve as a recommendation to buy, sell, or hold any security and is not an offer or sale of a security. Information contained within should not be perceived as a research report and is not intended to serve as the basis for any investment decision. Any third-party views reflected herein do not reflect the opinion of The Street Sheet. All investments involve risk and the past performance of a security does not guarantee future results or returns. There is always the potential for financial loss when investing in securities or other financial products. The information contained in this newsletter is subject to change without notice, and we do not undertake any obligation to update it. Readers are encouraged to conduct their own research and due diligence and seek advice from licensed professionals regarding their specific financial needs and circumstances. By reading this newsletter, you agree to hold us harmless from any and all losses, liabilities, costs, or expenses arising from your use or reliance on the information provided. There is no warranty as to the accuracy or completeness of the factual matters included in any advertisement or sponsored content in the newsletter. You have not performed any research on any entity, or its business, that advertises or submits any sponsored content. The Street Sheet is reader-supported. When you buy through links on our site, we may earn an commission.