Powers: Bad news is good news for rates, which is weird to think

Market Expectations & Rate Cuts - The market has largely priced in a 25 basis point rate cut, with futures indicating a 98% chance of such a cut in the coming weeks [1][2] - A weaker jobs report could potentially put a 50 basis point rate cut on the table [2] - Investors hope for a jobs report showing a cooling labor market without a sharp spike in unemployment, as "bad news is good news" for rates in the current environment [3] Investment Strategy - The industry favors rate-sensitive areas like dividend stocks, REITs, utilities, and small caps [3] - Dividend payers tend to outperform in rate-cutting cycles, attracting investors looking for yield [10][11] - REITs and utilities benefit from falling rates, with cheaper borrowing and rising property values for REITs, and utilities acting as a bond proxy [11] Specific Stock Pick: PNC - PNC is highlighted as a good pick because regional banks are direct beneficiaries of Fed rate cuts, which flow through to economics on the lending side [6][7] - PNC is a well-run super-regional, highly disciplined bank that will benefit from lower funding costs, more refi activity, and increased fees due to Fed cuts [9] - PNC offers a cheaper valuation than a year ago, pays a great dividend, and has grown its dividend by 13% per year over the past decade [9] Regional Banking ETFs - KRE (Spider Regional Banking ETF) provides exposure to regional banks but is equal-weighted and leans towards mid and small-cap names [7] - IAT (iShares Regional Bank ETF) is cap-weighted with PNC at the top, making it a way to gain exposure, though the recommendation is to own PNC individually [8]