Can Stocks Keep Rallying?

Join TradeAlgo's Free Live Trading Session ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Can Stocks Keep Rallying? If the Nasdaq 100 futures is any indication, stocks are poised for a big green day today with the futures climbing 0.4% yesterday when the markets were closed. Two European Central Bank officials said a June rate cut could happen, leading the Stoxx 600 to jump 0.28% yesterday. - “Thanks to this disinflationary process, inflation is converging to our 2% target in a sustained way, and the time is thus ripe in June to ease the monetary policy stance and start cutting rates,” ECB Governing Council Member Olli Rehn said in a speech. ECB Governing Council Member Olli Rehn (Photo: EPA / Alessandro Di Meo) This would be far sooner than the Federal Reserve’s plan. Wall Street prices in the first rate cut to happen in September. Right now, the S&P 500 is heavily skewed toward the top 10 stocks. The group is responsible for more than 35% of the weighting — a record high. Analysts at BTIG used this point to make a case for the stock market to keep climbing — despite the recent warning signs in the consumer sector. - "Some parts of the consumer have been weak for a long time, while others are newfound and still too early to call the top," the analysts said. The tech sector continued to report strong earnings, so it may not matter much if other sectors struggled, analysts said. - "We call this the breadth paradox because the bigger of a weight these names become in the index, the less breadth matters, assuming these names continue to move higher," the analysts said. This week will be relatively light in catalysts. Fed will release its Beige Book economic Survey on Wednesday, while New York Fed President John Williams will speak at the Economic Club of New York on Thursday. The PCE will be released on Friday — which is likely to receive the most attention. Could This Be The Next Powerful Compounding Stock? Today’s Stock Pick: Freshpet (FRPT) Freshpet is a sneaky way to play the pet industry that is witnessing a major disruption. Namely, pet owners are starting to “humanize” pets more. They want to pander them. Feed them the same food that humans eat. Fresh, all-nautral foods are becoming popular with people, and they want their pets to also eat fresh foods, as well. That’s where Freshpet comes into the picture. (Source: Freshpet) You can see the evolution of pet foods in the graphic below: (Source: Freshpet) Pet food is a $52 billion industry, and Freshpet holds a whopping 96% of the market share for fresh/frozen foods in measured channels. Most of their sales came from dog food category. It only holds a 3% share in dog food which potentially offers a long growth runaway. (Source: Freshpet) Since Freshpet plays in a newer category, it takes time for the company to develop brand awareness. Household penetration grew steadily from just 5.7 million to 11.6 million in 2023. Last year saw an acceleration in household penetration growth. (Source: Freshpet) Sure enough, Freshpet posted six straight years of more than 25% revenue growth. 2023 grew by 29% That is a strong, strong growth rate that is a classic trait of a powerful compounding stock. (Source: Freshpet) As for its 2027 targets, Freshpet aims to nearly double its household penetration to 20 million, increasing net sales to $1.8 billion (from $766 million last year), and posting an adjusted EBITDA margin of ~18%. So, the next four years are poised to be a compounding growth story for Freshpet that could work wonders for its stock price. (Source: Freshpet) Bottom line: New companies leading new categories are often a strong growth story for the stock market. Freshpet has about 96% market share in fresh/frozen foods for pets, which gives it a huge head start over other competitors. With the company expecting ~15%+ annual growth for the next four years, this is the company to watch out for. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](