Happy Monday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟥 | US stocks fell Monday. Wall Street appeared to be taking a breather after major averages reached record highs last week.

• 📈 | One Notable Gainer: Shares of Domino’s Pizza jumped 6% after the company announced it would raise its dividend by 25%, to be paid on March 29.

• 📉 | One Notable Decliner: Shares of Moderna fell 3% after a downgrade from HSBC. The investment bank said the company’s RSV vaccine looks less effective than competitors, which could hurt future growth.

• ✂️ | Tomorrow's Trade: Rate-cut Rewards. Scroll down for more.

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MARKET MOVERS

Carvana, Bloomin’ Brands, & Rivian

BRK.B (-2%) Warren Buffett: Berkshire’s boom days may be over as his company approaches $1 trillion in value (CNN Business)

RCM (25%) R1 RCM surges after New Mountain $13.75 a share takeover offer (Seeking Alpha)

FRPT (20%) Freshpet’s stock rallies as pet-food maker swings to larger-than-expected profit (MarketWatch)

HCP (14%) Morgan Stanley upgrades HashiCorp stock to equal-weight on cloud demand (Investing)

MU (4%) Micron starts mass production of memory chips for use in Nvidia's AI semiconductors (Reuters)

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OVERHEARD ON THE STREET

Fortune: The US Federal Trade Commission, eight states and Washington DC sued to block Kroger Co.’s $24.6 billion acquisition of Albertsons Cos. Monday, arguing the tie-up would lead to lower wages for workers and higher prices for groceries.

NYP: Wendy’s is preparing to test an “Uber-style” surge-pricing model where prices will fluctuate throughout the day based on demand — meaning a Dave’s burger will cost more during the lunchtime rush.

CNBC: JPMorgan Chase CEO Jamie Dimon thinks there’s a better-than-even chance that the U.S. is heading for a recession, though he doesn’t see systemic issues looming.

Reuters: Investment firm Kerrisdale Capital disclosed a short position in Carvana on Monday, calling it a "poorly capitalized, growth-challenged auto retailer".

QZ: Apollo Global Management's chief economist said the current bubble in AI stocks is bigger than the 1990s dot-com era bubble.

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TOMORROW’S TRADE IDEA, TODAY

Rate-Cut Rewards

Waiting Patiently

The last time the Fed raised rates was at its July 2023 meeting. Since then, it has opted to pause any hikes or cuts at each of its meetings. Everyone from investors to economists is waiting for a round of rate cuts to begin.

Due to a hotter-than-expected February CPI report, analysts now predict cuts will happen in June. 

In preparation, Barclays (BCS) has highlighted some stocks that might be poised for success in a rate-cut environment.

Dining & Banking

Each stock on the list carries an “overweight” rating from Barclays. Only 2 of the 10 stocks trade on the Nasdaq, with the other 8 trading on the NYSE. 

Barclays is bullish on Darden Restaurants (DRI), the parent company of Olive Garden and LongHorn Steakhouse. It’s currently the only large-cap casual dining stock. Its shares are up 13.1% over the past 12 months. 

Regional banks haven’t had a stellar run recently (looking at you, SVB), but Barclays is excited about Fifth Third Bancorp (FITB). The bank’s shares are down more than 3% this year, but Barclays sees room for improvement. Responsible risk-taking and share buybacks are expected in the near future.

Down, But Not Out

When it comes to retail, Barclays likes Gap (GPS). Despite a 45% increase over the last 12 months, the stock is down 8% this year. 70% of analysts currently give it a “hold” rating. Its fourth-quarter results are set to be released in early March. 

Bunge (BG) is another slumping stock Barclays is bullish on. The agribusiness stock is down 7% this year and has underperformed the S&P over the past 12 months. Wall Street analysts give it a 24% upside, confident that its current growth initiatives will pay off. 

Rate cuts should be a tailwind for many sectors of the economy. According to Barclays, these stocks could reap the benefits.

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ON OUR RADAR

Intuit: Intuit research found that three in four (73%) Gen Z respondents were hesitant to set long-term goals. That’s 10 percentage points higher than the general population. Further, two-thirds (66%) of Gen Z respondents vs. 58% of the general population are not confident that they’ll ever have enough money to retire.

Redfin: The average US homeowner has spent just short of 12 years in their home, up from 6½ years two decades ago.

NBC: The average 401(k) balance rose to $107,700 by the third quarter of 2023, up 11% from the year before, according to Fidelity.

CNBC: Taylor Swift’s Eras Tour undoubtedly helped the local economies she held concerts in, but Nomura sees the national-level effect being smaller than some anticipate.

Reuters: Options on artificial-intelligence darling Nvidia accounted for 25 cents of every dollar of premium - the price of contracts - traded in U.S. single-stock options over the past month.

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