What Happened?
A number of stocks jumped in the morning session after markets rebounded following a sharp sell-off in the previous trading session as weaker-than-expected U.S. jobs data fueled investor hopes for a potential interest rate cut by the Federal Reserve.
The July Nonfarm Payrolls report revealed a gain of only 73,000 jobs, significantly below the 110,000 expected. Compounding the news, prior months' figures were revised downward by over 250,000 jobs. This data, indicating a cooling labor market, has led investors to dramatically increase bets on a September interest rate cut by the Federal Reserve, with the probability jumping to over 80% according to the CME FedWatch Tool. The prospect of lower borrowing costs typically stimulates economic activity and boosts consumer spending on non-essential goods and services, which directly benefits companies in the consumer discretionary space.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Real Estate Services company RE/MAX (NYSE: RMAX) jumped 3.1%. Is now the time to buy RE/MAX? Access our full analysis report here, it’s free.
- Education Services company Perdoceo Education (NASDAQ: PRDO) jumped 4.5%. Is now the time to buy Perdoceo Education? Access our full analysis report here, it’s free.
- Consumer Electronics company Peloton (NASDAQ: PTON) jumped 3.3%. Is now the time to buy Peloton? Access our full analysis report here, it’s free.
- Gaming Solutions company PlayStudios (NASDAQ: MYPS) jumped 3.2%. Is now the time to buy PlayStudios? Access our full analysis report here, it’s free.
- Apparel and Accessories company VF Corp (NYSE: VFC) jumped 8.7%. Is now the time to buy VF Corp? Access our full analysis report here, it’s free.
Zooming In On VF Corp (VFC)
VF Corp’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 9.1% on the news that it reported first-quarter earnings that significantly beat analyst expectations for both revenue and profit. The apparel and footwear conglomerate posted revenue of $1.76 billion, topping the consensus estimate of $1.7 billion. More impressively, its adjusted loss per share came in at $0.24, which was much narrower than the anticipated loss of $0.33. The company's adjusted operating loss of $56 million also significantly outperformed its own guidance. This strong performance was fueled by growth in its The North Face and Timberland brands, which helped offset a continued decline in its Vans division. The better-than-expected results suggested to investors that the company's ongoing transformation plan and cost-saving initiatives were successfully taking hold, boosting confidence in its turnaround strategy.
VF Corp is down 41.1% since the beginning of the year, and at $12.70 per share, it is trading 52.9% below its 52-week high of $26.93 from January 2025. Investors who bought $1,000 worth of VF Corp’s shares 5 years ago would now be looking at an investment worth $213.34.
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