Photo by Yiorgos Ntrahas on Unsplash

Today’s episode of Full Court Finance at Zacks breaks down some of the catalysts behind the recent market comeback. The episode then dives into three stocks, Micron (MU) , Lululemon (LULU) , and RH (RH) , that investors might want to consider buying at solid discounts ahead of their upcoming earnings results next week.

Vide Length: 00:26:15

The market has mounted quite the comeback over the last week. The Nasdaq is up 12% off its March 14 lows, with the S&P 500 around 8% higher through morning trading Tuesday. Wall Street appears happy to finally have a clearer rate hike roadmap.

After the initial 0.25% raise off the rock-bottom levels, the outline calls for the central bank to raise their core interest rate to near 2% by the end of 2022 and around 2.75% by 2023. Tons of uncertainty remains and Jay Powell and the Fed could easily be forced to change course and lift rates more quickly to combat 40-year high inflation.

Higher rates are historically a drag on stocks, especially growth names. The ongoing Russian invasion of Ukraine makes the near-term outlook for the market increasingly difficult to project. Luckily, stocks are still down big in 2022, with the Nasdaq trading 15% below its November peaks even with the recent rally.

Plus, even though the 10-year U.S. Treasury is sitting at 2.37% and approaching three-year highs, Wall Street has few alternatives outside of stocks if they hope to beat 7%+ inflation. And despite all of the real setbacks and rising prices, the longer-term outlook for S&P 500 earnings, margins, and revenue is strong, especially looking out to the full-year 2022 and beyond.

Micron Technology, Inc. is the first stock we dive into before it releases its second quarter fiscal 2022 financial results on Tuesday, March 29. Micron is a memory chip powerhouse that’s becoming less cyclical and its growth outlook for this year and next is impressive. And MU’s valuation makes it even more appealing to potential investors.

The next stock up is Lululemon. The athleisure apparel firm will release its Q4 FY21 earnings results on March 29. Lululemon stock has soared in the last five years to crush Nike and the S&P 500. LULU has helped change the way people dress and its growth projections remain stellar. Thankfully for investors who might have ‘missed out’ on Lululemon’s run, the stock has tumbled off its November records, having now lost a large chunk of its pandemic gains.

RH, formally known as Restoration Hardware, is a standout in the furniture and home décor space. RH has expanded its retail footprint, with plans that go far beyond its massive luxury stores with restaurants into hotels and beyond. RH, like LULU, has seen tons of its covid gains washed away and the stock is starting to look more like a bargain.