Romania’s central bank pushed back against any expectations of an early start to interest rate cuts, signaling an extended period of caution due to a worsening inflation outlook https://t.co/hswLG8SGTj ...

Market Overview - The U.S. government has reopened after a 43-day shutdown, which had raised investor concerns and disrupted economic data flow [1] - A growing number of Federal Reserve policymakers are hesitant about further interest rate cuts, with market odds for a December reduction now near even [1][12] - Inflation concerns and signs of stability in the labor market are influencing Fed officials' views on interest rates [1][12] Stock Performance - Major tech stocks experienced significant declines, with Nvidia down 4.7%, Tesla down 7.6%, and Broadcom down 5.4% [5][12] - The S&P 500 fell 1.62% to 6,739.60 points, the Nasdaq declined 2.48% to 22,825.50 points, and the Dow Jones Industrial Average decreased 1.38% to 47,590.87 points [6][12] - Eight of the eleven S&P 500 sector indexes declined, with information technology leading the drop at 2.74% [6][12] Sector Rotation - Cisco Systems saw a rally of about 5% after raising its full-year profit and revenue forecasts, indicating strong demand for networking equipment [7][12] - There is a noticeable market rotation away from technology stocks, with the S&P 500 value index gaining approximately 1.4% this week, while the growth index dipped 0.7% [7][12] - Walt Disney's shares tumbled 7.7% amid concerns over a prolonged dispute with YouTube TV regarding cable channel distribution [8][12] Employment Data - Recent data from ADP indicated that private employers shed over 11,000 jobs weekly through late October, and retail-related job postings dropped by 16% year-over-year in October, suggesting ongoing labor market weakness [8][12] Rate Cut Expectations - Traders are currently pricing in a 47% chance of a 25-basis-point rate cut in December, a decrease from the previous week's 70% probability [9][12] Company-Specific Developments - APA Corp gained 3.2% following reports that Spain's Repsol is considering a reverse merger of its upstream unit with potential partners [9][12] - Memory device manufacturers Western Digital and SanDisk saw declines of 3.1% and 10.7%, respectively, after Kioxia Holdings reported lower sales and profits [9][12] Market Dynamics - Declining stocks outnumbered rising ones in the S&P 500 by a ratio of 1.8-to-one, with the S&P 500 posting 15 new highs and 6 new lows, while the Nasdaq recorded 51 new highs and 178 new lows [10][12]

Market Performance - Major indexes experienced a pullback, with the Dow down 797 points (-1.65%), S&P 500 down 113 points (-1.66%), Nasdaq down 536 points (-2.29%), and Russell 2000 down 67 points (-2.77%) [1][7] - Despite the pullback, indexes remain up over the past five trading days and the past month, although the gains are narrowing [1] Federal Reserve Insights - Federal Reserve members are reconsidering further interest rate cuts due to a lack of new data on jobs and inflation, exacerbated by the government shutdown [2] - Minneapolis Fed President Neel Kashkari expressed opposition to the recent rate cut and emphasized the need for new economic data before supporting further cuts [3] - St. Louis Fed President Alberto Musalem called for caution in proceeding with rate cuts, indicating potential market volatility [3] Sector Rotation - There has been a rotation out of speculative AI stocks and some established tech firms, with Palantir (PLTR) dropping 6.5% and AngloGold Ashanti (AU) down 5.2% [4] - Traders are shifting towards value stocks that have been underperforming, such as Merck (MRK) which rose 1.6% and Berkshire Hathaway (BRK.B) which increased by 2% [4] Earnings Reports - Applied Materials (AMAT) reported fiscal Q4 earnings of $2.17 per share, exceeding estimates, with revenues of $6.80 billion also surpassing expectations, although the stock fell 2.5% in late trading due to lower revenue guidance for the next quarter [5] - Beazer Homes (BZH) reported fiscal Q4 earnings of $1.02 per share, significantly above the anticipated 80 cents, with revenues of $791.9 million exceeding expectations, though both figures showed a decline compared to the previous year [6]

Market Reaction to Government Shutdown - The end of the government shutdown is expected to have minimal impact on most individuals, although government employees are relieved to return to work [2] - The market has shown improvement since the shutdown concluded, but underlying issues remain unresolved, indicating potential future risks [3] Economic Data and Federal Reserve Policy - There is concern regarding potential delays in the release of government data, which could affect the Federal Reserve's ability to adjust interest rates as anticipated by the market [4][5] - The accuracy of economic data has been compromised post-COVID, complicating the Fed's decision-making process [6][7] Interest Rate Expectations - Current expectations for interest rate cuts have been adjusted to 5 to 6 cuts over the next year, which is higher than market anticipations of about 3 to 3.5 cuts [7][8] - The market's narrow performance is attributed to the desire for more aggressive Fed cuts to stimulate the private economy [9] Market Performance and Earnings Growth - The Dow Jones Industrial Average has reached new record highs, suggesting a potential shift in market narrative [10] - There are signs of improving earnings, with double-digit year-over-year growth reported for the median stock in the third quarter, marking the first such growth in four years [13][14] Future Earnings Projections - Consensus estimates for earnings growth next year are in the low double digits, which is considered achievable [15] - The need for interest rate cuts is emphasized as crucial for sustaining market momentum and broadening economic performance [16][17] Economic Outlook - The worst of the economic slowdown is believed to be behind, with indications of entering a new bull market [18] - A balanced approach in monetary policy is currently observed, although markets may challenge authorities if expectations are not met [19]

We're joined by Mike Wilson, chief U.S. equity strategist at Morgan Stanley. Really great to have you with us on this first day after the government shut down. Mike, now that it's over, now what.Good morning. Good morning, Nathan. Yeah.Well, I think most people probably won't feel the effects. I'm sure the government employees are happy to get back to work. And look, I think from our standpoint, from a market standpoint, I mean, this is the longer that this kind of, you know, lagged into the holidays, it de ...

Core Insights - The Federal Reserve has implemented two interest rate cuts in 2023, which is expected to positively impact actively managed bond ETFs like the Neuberger Berman Total Return Bond ETF (NBTR) [1][2] - NBTR, approaching its two-year anniversary, has outperformed the Bloomberg U.S. Aggregate Bond Index, with a year-to-date gain of approximately 8% compared to the index's gain of slightly over 7% [2] - Goldman Sachs Asset Management anticipates further rate cuts by the Fed, predicting a 25 basis point cut in both October and December, followed by two additional cuts in 2026 [3][4] Fund Performance and Strategy - NBTR's active management strategy is highlighted as a key differentiator in its performance this year, with expectations for continued strong performance into 2026 [2] - The fund has a 30-day SEC yield of nearly 5% and a duration of 5.85 years, positioning it in the intermediate-term bond category, which may attract more investors due to its compelling yields [6] Market Context - The potential end of the longest government shutdown on record could benefit active fixed income ETFs, including NBTR, although the Federal Reserve's actions remain a significant factor [3] - Historical trends suggest that the dollar may stabilize following the start of Fed easing cycles, which could make dollar-denominated debt, including bonds in NBTR, more attractive to global investors [5]

Susan Collins, president and chief executive officer of the Federal Reserve Bank of Boston, during a Bloomberg Television interview at the Kansas City Federal Reserve's Jackson Hole Economic Policy Symposium in Moran, Wyoming, US, on Friday, Aug. 22, 2025.Boston Federal Reserve President Susan Collins on Wednesday said she will be reluctant to support further interest rate cuts anytime soon with inflation still high and policymakers hampered by a lack of data due to the government shutdown."Given my baselin ...

Group 1 - The dollar index (DXY00) is up by +0.12%, driven by weakness in the yen, which fell to a 9.25-month low against the dollar due to concerns over Japan's fiscal policy [1][5] - The dollar is under pressure as a resolution to the US government shutdown appears imminent, with the Senate passing a temporary continuing resolution and the House expected to follow suit [2] - Markets are pricing in a 65% chance that the Federal Open Market Committee (FOMC) will cut the fed funds target range by 25 basis points at the next meeting on December 9-10 [3] Group 2 - The European Central Bank (ECB) is seen as largely finished with its rate-cut cycle, while the Federal Reserve is expected to cut rates several more times by the end of 2026 [4] - ECB Executive Board member Schnabel indicated that interest rates are "absolutely" in a good place, citing positive momentum in the Eurozone economy and slightly tilted inflation risks [4] - Swaps are pricing in a 3% chance of a -25 basis point rate cut by the ECB at the December 18 policy meeting [4]

Core Insights - Small-cap equities have shown impressive performance over the past 90 days, with some major indices recording double-digit gains, indicating responsiveness to Federal Reserve interest rate cuts [1] - The recent strength in small-caps may encourage investors to explore more sophisticated investment strategies, such as the O'Shares U.S. Small-Cap Quality Dividend ETF (OUSM) [2] Fund Overview - OUSM is a $917.8 million fund that emphasizes dividends, low volatility, and quality, distinguishing itself from many traditional small-cap ETFs [3] - The fund's methodology is seen as a potential driver for a rally into year-end, positioning it as a viable small-cap investment for 2026 [4] Market Outlook - Goldman Sachs Asset Management (GSAM) believes small caps present a strong investment opportunity, supported by easing cycles and attractive valuations, with earnings growth expected to accelerate [5] - Although OUSM was not directly mentioned in the GSAM report, it is suggested that nuanced approaches to small-cap investing could yield rewards [6] Sector Focus - GSAM highlights aerospace/defense, strong consumer names, healthcare, and technology as key sectors for small-cap investments, with OUSM allocating 63% of its portfolio to these sectors [7] Earnings Performance - U.S. small-cap earnings are showing signs of a strong rebound, with the second quarter of 2025 marking the first positive earnings due to improving sales and margins [8] - Notably, 25% of Russell 2000 companies have reported at least two consecutive quarters of accelerating earnings, with expectations for this momentum to continue into 2026 [8]

Core Insights - The company is executing well on its priorities set in October, focusing on efficiency, planning progress, and opening new outlets [2] Market Conditions - The market sentiment remains cautious due to uncertainty surrounding the budget and potential interest rate cuts from the Bank of England, leading to stretched affordability for many customers, especially first-time buyers [2] - There is a lack of urgency among customers as they await outcomes, making customer commitment a key focus for the sales teams [2] Pricing and Incentives - Incentives continue to play a significant role in sales, with underlying pricing remaining broadly flat, although pricing in southern regions shows some variation [3]