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Written past Joey Frenette at The Motley Fool Canada

Stock markets spiked in a large fashion on Wednesday following the U.S. Federal Reserve's decision to hike rates by the expected amount. Indeed, when asked, Fed chairman Jay Powell ruled out whatever triple-signal hikes.

Indeed, iii hikes in one get was a scenario that seemed to problem broader markets the most. Though the Fed cannot guarantee a soft or "soft-ish" landing, its transparency and effort are surely appreciated by investors. Indeed, it's the assurance that has many investors piling back into stocks. As the 10-twelvemonth U.S. note flirts with three%, though, the tightrope walk between fighting inflation and keeping the stock marketplace afloat looks to be reaching some sort of equilibrium.

Undoubtedly, the bond marketplace has waned considerably over the last year, as bond yields climbed. Could information technology be that we're closer to meridian yields on the 10-yr and peak aggrandizement? That'south the meg-dollar question. Upward alee will be April's CPI results, and if they bear witness show of a drastic slow of footstep or aggrandizement rolling over, the phase could be set for a remarkable second-half rally that could meet markets striking fresh new highs.

Undoubtedly, such a scenario would pull bail yields lower and act every bit a massive boost to growth stocks. The growthiest stocks that rolled over this year — think high-multiple tech — could be in a spot to enjoy a celebrated relief rally. Of course, the magnitude of such a relief rally depends on the Fed'southward rate roadmap.

Given all the cynicism, I think many pinnacle tech titans could have room to run. They've already crashed, with the bubbliest of bubble stocks at present downwardly well over 70-eighty% of their value. Cathie Wood's ARK Innovation Fund lost nigh 70% from peak to trough. That'south some serious hurting, and odds are, most of the impairment is already in!

In Canada, Shopify (TSX:SHOP)(NYSE:SHOP) strikes me every bit one of the all-time deal bets to play what could be a relief rally in the high-multiple growth stocks.

Shopify

Shopify is an e-commerce house that needs no introduction. The stock has gotten obliterated of late, plunging from over $2,000 per share to below $600 per share. Today, the stock got a overnice bid-up due to assurance from the Fed that it will not look to hike by more than than 50 bps in one go. Indeed, the pace of aggrandizement could change this, equally they'll be sure to be data-driven after the next few front-loaded rate hikes are out of the manner.

In whatever case, Shopify is continuing to innovate, and with a paw in and so many pies (recall payments and AR tech), SHOP stock looks likewise cheap to ignore here. While I wouldn't get as far as to say the bottom is in, I would say that the stock is pretty darn cheap at below xx times sales. Yes, that's expensive however, leaving it vulnerable to more downside if the Fed picks up the pace. However, versus its growth contour, I'd argue shares have fallen way as well hard.

Moving ahead, Shopify could begin to outmuscle rivals in payments, and the rise of the metaverse could prove as a compelling wild card. Could it be that the stores of the futurity have 3D models customers can view or try before they purchase? If that's the future of online shopping, Shopify is a proper noun to stash for the long booty. It'south innovating at a rapid pace, and this will pay off eventually. In the meantime, all eyes are on macro trends, which could drag on Shopify stock for quite some time.

My takeaway? I recollect it's fourth dimension to average into a position over the next twelvemonth.

The post Shopify Stock Looks Oversold and Fix to Rebound appeared first on The Motley Fool Canada.

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Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify.

2022

Source: https://ca.finance.yahoo.com/news/shopify-stock-looks-oversold-ready-150000882.html

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