Walser: Divided Fed Shows Growing Instability, ORCL Poses A.I. Questions

Federal Reserve Insights - The Federal Reserve is currently exhibiting a divided stance, with some members favoring steady rates while others are more inclined towards rate cuts, indicating instability within the Fed [2][4][5] - The probability of a rate cut has fluctuated significantly, moving from 44% to over 90% within a short period, which is unusual and reflects market uncertainty [5][6] Market Conditions - The current accommodative monetary policy is seen as beneficial for equities, particularly small-cap stocks, with projections suggesting 2026 could be favorable for this segment [2][10] - The Fed has injected billions into the economy recently, transitioning back to quantitative easing, which may lead to currency devaluation [12][13] Investment Opportunities - Companies like L, which has a strong history of dividend growth and is currently 20% off its all-time high, are viewed as potential value plays [14] - Visa is highlighted as a strong investment due to its transition from traditional finance to blockchain technology, supported by significant free cash flow and a long history of dividend growth [16][18] Sector Analysis - The technology sector, particularly companies involved in AI and blockchain, is seen as a key area for growth, with Oracle facing pushback due to its debt financing strategy [7][9][19] - The overall economic stimulus from government spending is expected to positively impact equities, although its effects on the bond market may differ [10][11]