Market Outlook & Strategy - Barclays maintains a contrarian view, anticipating the Fed will not cut rates in September [1] - A hawkish tone from Jackson Hole could negatively impact small caps (especially value segment), home builders, parts of retail, and financials [2][3] - Caution is advised in small caps, requiring selectivity at the index level [4] - Financials are viewed positively due to strong earnings, good revisions, and potential benefits from increased corporate and capital markets activity [4] - Big tech is considered a safer space with high earnings quality and growth, especially if valuations pull back; previously trading around 29 times forward earnings, now approximately 28 times [5][6] - Broadening of market gains beyond big tech is uncertain, as results outside of financials and big tech are mixed [7][8] Earnings Analysis - Aggregate Q2 earnings look strong with over 10% growth and sales growth close to 6%, indicating positive operating leverage [9] - However, positive results are concentrated in financials and big tech; most other sectors are struggling with negative operating leverage [9] - The full impact of tariffs is yet to be seen, potentially affecting future earnings [9]

Fed Policy & Market Expectations - CNBC's Fed survey indicates respondents anticipate two rate cuts, totaling 50 basis points, with 25 basis points expected in September and another 25 in December [6] - The market is pricing in an 84% probability of a rate cut, leaving a 16% probability of no cut [9] - A majority (70%) of respondents believe Powell's speech at Jackson Hole will be neutral [3][4] - The market may be disappointed if Powell's speech is neutral or doesn't address policy at all [7][8] Inflation Outlook - Despite expectations of rate cuts, inflation is projected to remain around 3% this year and next, exceeding the Fed's target by 1 percentage point [6] - 63% of respondents believe substantial price increases are on the way due to tariffs [3] Potential Fed Chair Replacement - The survey suggests Kevin Hasset is the most likely candidate to replace Fed Chair Powell, according to respondents, but they believe former Fed Governor Kevin Warsh would be a better choice [2][3][4] - Among named candidates, Hasset is the frontrunner, followed by Fed Governor Chris Waller, Kevin Warsh, and former St Louis Fed President James Bullard [3] - 41% of respondents believe the next Fed chair will conduct policy independently of the president, while 37% think it will be in coordination [4]

Steve Leeman kicking off our 3-day coverage of the Jackson Hole Economic Symposium with a very special edition of the CNBC Fed Survey. And boy, you got a beautiful shot there this morning, Steve. Yeah, and we just had some live elk there.Did you see that. Uh the Fed meets in Jackson Hole this year, uh Andrew, amid unprecedented presidential pressure for a rate cut, unsettled questions about the next Fed chair, and tariff inflation. Uh the CNBC Fed survey special Jackson Hole edition found respondents believ ...

All right. So, again, we we kind of hit this a couple times in the show. We've seen a change in momentum, a lot of anxiety about what J Pal is going to uh say coming up on Friday and how doubbish or hawkish he may be.What are your expectations. Do you think that he's going to signal a 25 point rate cut. Will he leave the door open for a 50point rate cut that it seems the market really wants. >> I doubt that he'll leave the door open for a 50 basis rate point cut.Um it doesn't make sense given the basic unde ...

At Home Depot, it's up 3% today despite a slight miss on the top and bottom lines. It second straight quarter of missing estimates. Investors were encouraged by the company standing by its fullear guidance, expecting comparable sales to rise about 1%.CFO Richard McFale also told CNBC that comp sales in July were up 3.3% from the same quarter in 2024. It's the best monthly comp of the year. So, sticking with retail, Target is set to report earnings tomorrow before the bell.The stock is tracking for its third ...

Market Expectations and Fed Policy - The market anticipates insights from the Fed chair regarding the future trajectory of interest rates [1] - There's a risk that the Fed chair's message might not align with market expectations, potentially leading to increased volatility [2][4] - Evercore ISI suggests a potential 7% to 15% market pullback in October if uncertainty about future Fed actions persists [6] - Goldman Sachs projects three rate cuts this year and two the following year, while Barclays anticipates only one rate cut in December, highlighting the uncertainty surrounding future Fed actions [9][10] Interest Rate Cut Debate - The market is not in sync with the Fed's recent stance, and the two-year yield suggests the Fed should consider cutting rates [11][12] - A potential 25 basis points rate cut in September is suggested, supported by data and political considerations [11][13] - Concerns exist regarding Fed independence, particularly if rate cuts are not implemented [14] Market Outlook and Strategy - Choppy, sideways trading is expected to persist until the end of the month [15][17] - The market is already pricing in a rate cut, reflected in the Nasdaq and S&P reaching new highs, indicating a potential downside risk if Powell doesn't meet expectations [19][20] - The Fed chair's upcoming speech at Jackson Hole is anticipated to focus on Fed independence rather than providing hints about future rate decisions [20][21]

that's probably what's behind the miss. >> Yeah. Makes a big difference there Diana thank you so much.It could be a big week for stocks with more earnings. And Fed Chair Powell's speech at Jackson Hole. Let's bring in Keith Lerner Truist Wealth Co-Chief investment officer, to discuss.Let's start with Jackson Hole because some out there are saying that could be potentially bearish for stocks, especially if Fed Chair Powell indicates to the market something a bit more hawkish than they may like to see. What's ...

Economic Outlook - The economy is potentially transitioning from a summer slowdown into an acceleration phase, supported by encouraging retail sales data [3][4] - Labor market weakness is contributing to the likelihood of a Federal Reserve rate cut [3] - An improved economic environment could lead to stock market gains [4] Monetary Policy - The market anticipates potential rate cuts, with some speculating up to 50 basis points [6][8] - The Federal Reserve may consider a 50 basis point rate cut as an "insurance" against a weakening labor market [8] - The Federal Reserve's balance sheet runoff, particularly the $35 billion per month in MBS runoff, is exerting subtle tightening pressure on financial conditions [10][11] - Ending the balance sheet runoff could alleviate pressure on the mortgage market [12][13] Investment Opportunities - Materials, staples, and energy sectors, which have underperformed in the recent rally, present attractive investment opportunities [15] - Electric equipment and AI power sectors have outperformed since April 8th [15]

Market Trends - Bitcoin reached a new All-Time High (ATH) yesterday, and this process of repeating ATHs is expected to continue in the coming weeks and months [1] - The continued increase of the money supply is the driving force behind the repeated ATHs [1] - The increase in the money supply is projected to intensify following the anticipated rate cut in September [1]

Financial Impact of Rate Cut - A 100 bps rate cut would decrease Circle's annualized revenue by $618 million (-23%) [1] - Gross profit would decrease by $303 million (-30%) due to the rate cut [1] - Circle's margins would decrease by 3.3 percentage points following the rate cut [1] - Valuation would increase from 42x EV/annualized gross profit to 60.4x, approximately 50% higher [1] Strategies to Offset Impact - USDC supply would need to grow by $28 billion, representing 44% of the current $64 billion, to offset the rate cut impact [1] - Circle is pushing to launch transaction flow monetization products like CPN and Circle Chain [1] Market Actions - Circle conducted a ~$1.5 billion share sale [1] - Rate cuts are considered inevitable [1]