Markets Believe The Fed Got It Wrong: Rate Cut Reluctance Rattles Investors Nike, Benzinga, Robert Rubin, Boston Properties, Lululemon Athletica, Consumer Discretionary Select Sector SPDR Fund by https://www.benzinga.com/
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Investment Analysis:
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1. Short Lululemon Athletica (LULU) with a stop-loss at $205. The stock is overvalued and has a high P/E ratio of 47.63, which is not sustainable in the current market environment. There is also a potential slowdown in consumer discretionary spending due to rising interest rates and inflation. LULU could fall another 10% or more in the near future.
2. Buy the Consumer Discretionary Select Sector SPDR Fund (XLY) on dips with a target of $153. The ETF is undervalued and offers exposure to a diversified portfolio of consumer discretionary stocks, including Nike, which has a strong brand and growth potential. XLY is also a hedge against inflation, as it includes cyclical sectors such as energy and materials.
3. Sell Boston Properties (BXP) with a stop-loss at $142. The real estate stock is overvalued and faces headwinds from rising interest rates and higher mortgage rates. BXP could fall another 8% or more in the near future, as investors shift their focus to value stocks and defensive sectors.