Stock Market Live December 5: S&P 500 (SPY) Heads for Another Winning Day

Analysts are still pounding the table over MP Materials (MP).

That’s because the fight to secure more rare earth supply is still heating up. Granted, China did pause its rare earth restrictions for a year. However, there is still a strong possibility of more rare-earth supply issues, which MP Materials can assist with.

For one, it operates the Mountain Pass mine in California.

Two, the U.S. Department of Defense announced it was buying $400 million worth of MP’s preferred stock – positioning itself as the company’s biggest shareholder. And three, MP signed a $500 million deal with Apple, which agreed to buy rare earth magnets from it.

In addition, analysts see the stock rallying even higher.

Morgan Stanley just upgraded MP Materials to an overweight rating with a price target of $71 a share. While China did pause its rare earth restrictions for a year, there is still a strong possibility of more rare earth supply issues, which MP Materials can assist with.

Analysts at JPMorgan upgraded the miner to an overweight rating with a price target of $74 a share. “Our new rating reflects our view that rare earths national security concerns are ‘here to stay’ despite China’s reported one-year pause on export restrictions, with risks remaining, especially for military exposure,” they said, as quoted by CNBC.

“MP’s unique mine-to-magnet vertical integration positions the company as the ex-China leader ready to immediately begin addressing these concerns, although it will ultimately take multiple players over many years to sort out.”

Shares of Ulta (NASDAQ: ULTA) are up about $77 a share on a volume spike to 1.6 million shares, as compared to its daily average volume of 572,773.

All after the company hiked its sales and earnings outlook again.

For its third quarter, the company’s EPS of $5.14 was above expectations of $4.64. Revenue of $2.86 billion was above expectations of $2.72 billion.

“Our third quarter results exceeded our expectations, reflecting the steady progress and momentum our team is building as we execute our Ulta Beauty Unleashed Strategy. Exciting assortment newness, improved in-store and digital experiences, and bold marketing efforts are resonating with our guests and drove strong sales results, market share gains, and growth across all categories and channels, with notable strength in ecommerce,” said Kecia Steelman, president and CEO, as quoted in an earnings release.

Moving forward, ULTA raised its full-year sales guidance to $12.3 billion from prior guidance of $12 billion to $12.1 billion. That’s also better than the estimates of $12.06 billion. Comparable sales are expected to jump 4.4% to 4.7% from 2.5% to 3.5%.

Driving markets higher are hopes for another rate cut next week.

In fact, markets are pricing in an 87% chance of a rate cut, according to CME FedWatch.

While we won’t see payroll numbers until after the Federal Reserve’s meeting on October 10, there are hopes that we’ll see more rate cuts after Challenger, Gray & Christmas reported that job cuts in November moved further ahead of one million for the year. We also just got US PCE inflation data for September, which showed a lower-than-expected read of 2.8%.

All of which markets appear to like.