Fed Easing Cycle Resumes: Market Implications

Market Performance - The Federal Reserve cut rates by 25 basis points on September 17, indicating a shift back to easing mode due to rising downside risks to employment [3][4] - Following the rate cut, the S&P 500 reached an all-time high, with the "Magnificent 7" stocks outperforming the market [2] Economic Outlook - The Fed's median projections now include additional rate cuts in October and December, increasing from previous expectations of only one cut [4] - The easing of recession fears has led to a rally in stocks, particularly benefiting economically sensitive cyclical stocks and smaller capitalization stocks [6][7] Housing Market - The housing sector is expected to benefit from lower short-term rates, with the average 30-year fixed-rate mortgage decreasing from 7.41% in January to 6.37% recently [8] - Despite a depressed level of new single-family home building, mortgage applications for refinancing have surged due to lower rates, providing extra cash to households [10] Upcoming Events - Only seven companies in the S&P 500 are scheduled to report earnings, with Costco and Micron Technology being notable for their economic insights [11] - Eighteen speeches from Federal Reserve members are scheduled, which will be closely monitored for clues on future rate cuts [11]