🚀 CMC Market Pulse: Rate Cuts In, Risk On.BTC +1.6%, ETH flat. Crypto mcap +2.4% to $4.2T. Fed cuts 25bps with more cuts projected. SEC clears path for next wave of ETFs. Solana treasury firm plans $4B SOL buys.Let’s break down this week’s top crypto narratives 🧵1/6 https://t.co/sTTmCdoUrG ...

We also have some other Fed rate cuts that people predict are are coming. >> So it's not just the 0.25% that we got cut yesterday. There is going to be another 25 bips in October or at least is what Poly Market is predicting with an 80% probability >> that we're going to get another 25 bips cut on October 29th and another 25 bips cut on December 10th.So it's not just about getting 25 bips now. It's about the trend of we're going to get 75 bips cut by the end of the year is what the poly market people are pr ...

Federal Reserve Policy & Market Reaction - The Federal Reserve cut rates by 25 basis points, triggering a jump in bond yields as some investors anticipated a more dovish outlook [1][3] - The market is readjusting for a less aggressive rate-cutting cycle, influenced by investors rethinking the Chair's comments [3] - There is a split within the Federal Reserve committee regarding future rate cuts, with differing opinions on the number of cuts for the remainder of the year [2][4][6] - Bank of America Research believes there will be only one more rate cut this year, as they do not foresee enough improvement on the inflation side to justify two cuts [7][8] Economic Indicators & Outlook - The labor market is confusing, but other measures of the economy do not suggest it is falling apart [10][11] - Upward revisions to August payrolls are expected, and the focus may shift back to inflation [10] - The 10-year Treasury yield is expected to move between 42% and 44% [16] Credit Market Dynamics - Credit spreads have tightened to the lowest level since 1998, increasing the importance of careful credit selection [1][26] - The market is experiencing strong liquidity and benign macroeconomic conditions, with low defaults and volatility [29][30] - The majority of supply in the credit market has been refinancing, with no net growth in these markets for the last few years [29] - Leveraged loan maturity walls are no longer a risk, but an opportunity, as much of the maturity wall has been refinanced [36]

Core Insights - U.S. inflation has consistently remained above the 2% target for several years and has recently diverged further from this target [1] - The Federal Reserve is planning to implement monetary policy easing through interest rate cuts despite the ongoing inflation [1] Inflation Trends - Inflation in the U.S. has been above the 2% target for years, indicating persistent inflationary pressures [1] - In the last three months, inflation has moved even further away from the target, suggesting a worsening situation [1] Federal Reserve Actions - The Federal Reserve is considering easing monetary policy, which may include rate cuts, in response to the current economic conditions [1] - This approach indicates a shift in strategy despite the high inflation rates, reflecting a focus on stimulating economic growth [1]

Gold slipped for a third day, as traders’ caution over future Federal Reserve rate cuts, along with a stronger dollar, tempered the metal’s recent surge https://t.co/cGyrcraX4X ...

Company Highlights - Intel announced a new deal with Nvidia to co-develop chips for PCs and data centers, resulting in a 23% increase in Intel's stock price, making it the top performer on the S&P for the day [2] - The government's investment in Intel has increased, with a 10% stake now valued at approximately $14 billion due to the stock price surge [3] - Synopsis, a long-term partner of Intel, also saw its stock rise following the announcement of the collaboration with Nvidia [2] Quantum Computing Developments - Palantir plans to invest £1.5 billion in the UK, having secured a deal with the UK Ministry of Defense to expand its AI software usage, which will create hundreds of new jobs [3] - IonQ signed a memorandum of understanding with the US Department of Energy to advance quantum technologies in space, exploring applications for quantum secure communications [4] - Regetti Computing's shares jumped 17% after securing a nearly $6 million contract with the Air Force Research Laboratory, increasing its market cap by about $250 million [5] Market Trends - Small-cap stocks, particularly the Russell 2000, outperformed due to favorable conditions from anticipated rate cuts, achieving a record close [6] - Jobless claims reported at 231,000, indicating improvement in the labor market, alongside a significant increase in the Philly Fed manufacturing index [8] - The 10-year yield rose, reflecting market reactions to recent economic data and Fed decisions [9] Upcoming Events - San Francisco Fed President Mary Daly's upcoming speech is anticipated to provide insights into the Fed's rate cut decision and inflation perspectives [10][11] - FedEx reported a strong quarter, with market reactions expected to gauge consumer health and global shipping trends [12] - LAR's report is awaited, with investors looking for direction amid challenges in the housing market [13]

Group 1 - Market trends can be inferred from investment flows, indicating which ETFs may be gaining popularity [1] - Disruptive technology has shown strong performance in certain years, while income funds have excelled in others [1]

Market Overview - The Russell 2000 index rallied by 2.4%, aiming for its first closing high since November 8, 2021, marking a potential end to a 967 trading-day stretch without a record [2] - This would be the longest streak since a 1,022 trading-day stretch that ended in April 2004 [2] Investor Sentiment - Traders are increasingly investing in risk assets, as evidenced by the Invesco S&P 500 High Beta ETF rising by 2.3% [3] - Momentum and growth-focused ETFs are leading the market, indicating a shift in investor sentiment towards stocks and expectations of further rate cuts [3]

Market Trend & Strategy - The market suggests the Federal Reserve (Fed) will implement approximately 1 and 3/4 more rate cuts before the end of the year, making it difficult to bet against the Fed's actions [1] - The old investment playbook of aligning with the Fed's actions remains effective [2] - Small caps and financials are identified as key sectors to watch, with potential opportunities in home builders [3] - The Russell 2000 is potentially reaching its first all-time high close since November 8th, 2021, marking a significant consolidation period [3][4] - A possible chase for performance is setting up, with a pivot towards sectors that have underperformed relatively [9] Financial Sector Analysis - Financials are trading without multiple expansion, presenting an opportunity as the sector's PE multiple remains at January levels [6] - The financial sector benefits from investor engagement, increased M&A activity, and regulatory relief [12] - Major banks like Citigroup, Goldman Sachs, Morgan Stanley, Bank of America, and JP Morgan are at 52-week or record highs [13] - Rate cuts without a recession are expected to drive a continued rally in bank stocks, influencing price target increases [14] Investment Considerations & Risks - Some argue against investing in banks outside the top six, citing the private credit market's encroachment on commercial lending and its sensitivity to net interest margin [15] - The big three (JP Morgan, Goldman Sachs, and Morgan Stanley) are favored due to their revenue streams from deal premiums, M&A transactions, and wealth management, making them less sensitive to interest rate moves [15][16] - Fintech companies, like SoFi, are seen as having significant upside potential due to their banking-as-a-service technology, which is less interest rate sensitive [19][20]

Market Trends - Retail sales and manufacturing show positive growth, suggesting economic strength [1] - GDP has been revised upwards, indicating a stronger economic outlook [1] - Jobless claims are lower, suggesting the labor market is not weakening as much as feared, and recession predictions may be inaccurate [1] - AI spending is a primary driver of market performance over the past year [1] Fiscal & Monetary Policy - Fiscal policy remains expansionary with continued government spending [1] - Monetary policy is becoming less restrictive, with potential rate cuts [1] - The Federal Reserve's uncertainty about future actions suggests a tendency to follow existing trends [1]