Happy Friday 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 moved lower on Friday. The Dow slipped 305 points, the S&P 500 hovered around flat, and the Nasdaq Composite rose less than 1%. While stocks mostly moved lower, all three major averages made healthy gains this week.

• 📈 | One Notable Gainer: FedEx rose 7% after posting adjusted earnings that beat analyst estimates. That earnings beat caused investment baking firm Stifel to increase its price target from $290 to $306.

• 📉 | One Notable Decliner: Shares of Nike slid 7% after its fiscal 2024 third-quarter results showed a lackluster outlook and slowing China sales.

• ☁️ | Tomorrow's Trade: The Sky’s the Limit. Scroll down for more.

Plus, this bootcamp tomorrow offers an immersive learning experience you don't want to miss out on.

MARKET MOVERS

Lululemon, Alphabet, and Reddit

LULU (-15%) Lululemon saw its stock tumble after its fiscal fourth-quarter earnings showed it’s struggling to reach American consumers (Quartz)

GOOG (+2%) Alphabet rose after Wedbush analysts claimed Google will emerge as a clear winner in the AI race that’s gripped Wall Street (BI)

BBY (+1%) Best Buy got a boost today after JPMorgan upgraded the stock and increased its price target by $12 to $101, claiming it’s “spring loaded” (CNBC)

RDDT (-7%) Reddit’s stock fell after its successful IPO yesterday. While shares are down, they are still far above the $34 a share offering price (Barron’s)

Tesla (-1%) Shares of Tesla fell after a Bloomberg report showed the company reduced production at its plant in China (Bloomberg)

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OVERHEARD ON THE STREET

Bloomberg: Apple is winding down a long-running project to design and develop smartwatch displays in-house, ending another pricey R&D initiative.

Reuters: Chrysler-parent company Stellantis said it will lay off ~400 U.S. workers as it works to cut costs, boost efficiency, and ramp up electric vehicle production plans.

Bloomberg: Apple opened an expansive new store in Shanghai Thursday, signaling the company’s commitment to China as a market and production base.

YF: Top economist Mohamed El-Erian says investors are rightly treating China like a short-term speculative play rather than a long-term investment.

CNBC: Cathie Wood’s Ark Invest bought nearly 10,000 shares of Reddit on the social media stock’s first day of trading.

TOMORROW’S TRADE IDEA, TODAY

The Sky’s the Limit

3 for 3

In a great week on Wall Street, Wednesday’s close saw all three major indexes close at record highs. This happened following the Fed’s indication that it still has three rate cuts in the cards for 2024. 

Investment bank Piper Sandler (PIPR) came out with a list of 8 stocks it believes still have room to run, driven by their high free cash flow yield and current momentum.

Cash is King

According to analyst Michael Kantrowitz, the idea that AI stocks are driving market momentum isn’t entirely accurate. He believes many of these stocks fall in the “value” category, not growth. In his opinion, the broader market has largely contributed to the market’s momentum. 

Kantrowitz shared some stocks with high free cash flow yield that he believes will prove winners during the rest of 2024.

The list is composed of stocks that have 52-week returns indicating strong momentum and a high free cash flow yield.

The List

On the financial side, Wells Fargo (WFC) fits the criteria. The stock has generated a 52% return over the past year, and its free cash flow yield is 16%. The stock is up over 17% this year. 

Healthcare company Cigna Group (CI) is also on the list. The stock is up 14% year-to-date and has a free cash flow yield of 9.1%. 

The stock with the highest free cash flow yield is Marathon Petroleum (MPC) at 17%. Its 52-week return comes in at 61%, and its stock is up over 30% this year.

If Piper Sandler is right, these companies could see continued growth in 2024.

ON OUR RADAR

Bloomberg: China leads the world in developing and deploying hypersonic weapons, while the US has spent $12 billion and has yet to field even one.

WP: The US House passed a $1.2 trillion bill to avert a government shutdown in a 286-to-134 bipartisan vote.

Bloomberg: After pleading guilty to insider trading, billionaire Joe Lewis says he should face a three-year supervised release and a $5 million fine rather than prison time.

Bloomberg: The “Misery II Index” suggests the French feel far more economic pain now than when they re-elected Macron as president nearly two years ago.

BI: Office employees now live nearly three times as far from their workplace as they did before the pandemic.