I'll bring into the conversation Kevin Hanks is with me to talk about the big picture here. It's good to see you Kevin. Uh we are seeing here still up arrows across the board right now.The Dow's up 161 points. It's gaining. It had been up 114 points.So stocks are going higher. The bond yields moving a bit higher. Some of your reaction as the Fed cuts rates 25 basis points.So, here's the main uh headlines from today. Yes, they cut 25 base points, two descents. Nicole, one on each side.Schmidt favored no cut ...

Al Drago / Bloomberg via Getty Images Federal Reserve policy committee members, including Lisa Cook, voted to cut their influential fed funds rate Wednesday. Key Takeaways The Federal Reserve lowered its key interest rate today by a quarter of a percentage point, as widely expected. Fed officials aim to boost the faltering job market as concerns over inflation take a back seat to fears that unemployment could rise. The Federal Reserve has once again cut its benchmark interest rate, aiming to breathe ...

Core Points - The Federal Reserve has decided to end its quantitative tightening (QT) strategy, which involves reducing its balance sheet [1][2] - The conclusion of QT will take effect on December 1, with a commitment to support maximum employment and achieve a 2% inflation target [2] Summary by Sections - **Quantitative Tightening Details** - The Fed has been allowing assets to mature since June 2022, reversing the significant increase in its balance sheet during the COVID-19 pandemic [2] - Monthly, the Fed has permitted up to $5 billion in Treasuries and up to $35 billion in mortgage-backed securities to mature without reinvestment [2] - Over the recent months, the Fed has allowed more than $2 trillion in bonds to mature, effectively pulling money out of the financial system [2]

Core Points - The U.S. Federal Reserve cut its benchmark interest rate range by 25 basis points to 3.75% to 4.0% and concluded the quantitative tightening process on December 1 [1] - Job gains have slowed, and the unemployment rate has slightly increased but remains low; inflation has risen and is still elevated [2] - There was some dissent regarding the rate cut, with Kansas City Fed President voting to hold policy steady while another governor favored a larger cut [2] Market Reactions - Bitcoin (BTC) traded at $111,700, down 3% over the past 24 hours following the rate decision [3] - Stocks showed modest gains, with the Nasdaq leading at a 0.5% advance; the 10-year Treasury yield rose to 4.02% [3] - Market participants are focused on Fed Chair Jerome Powell's upcoming press conference for insights on the economy and future rate cuts [4]

Core Viewpoint - The recent rebound in London gold prices, surpassing the psychological threshold of $4000 per ounce, is attributed to market expectations of a Federal Reserve interest rate cut and the potential end of quantitative tightening, which has led to renewed buying interest in gold [1][3][4]. Group 1: Federal Reserve Actions - The Federal Reserve is expected to announce a 25 basis point rate cut, with a probability of 99.9% according to the CME Fedwatch tool [3]. - There is anticipation that the Fed will end its quantitative tightening, which involves reducing its balance sheet of approximately $6.6 trillion [3][4]. - Market analysts suggest that a shift towards a more dovish monetary policy from the Fed will support gold prices, as it may weaken the dollar and lower the holding costs of gold [4][7]. Group 2: Gold Market Dynamics - Since September, London gold has seen a strong increase of approximately 29%, reaching a historical high of $4381 per ounce on October 20, before experiencing a significant sell-off [4]. - The recent drop below $4000 per ounce was not unexpected, but this level remains a critical psychological barrier for investors [5]. - Analysts indicate that if gold stabilizes around the $4000 mark, it may attract buyers back into the market [5]. Group 3: Long-term Outlook for Gold - Despite short-term pressures, the long-term outlook for gold remains positive, driven by ongoing concerns about inflation and currency devaluation [6][7]. - Historical trends show that gold typically performs well in the early stages of a rate-cutting cycle, and current economic indicators suggest further rate cuts may occur [7]. - The World Gold Council reports that while gold ETF inflows have been strong, total holdings are still below historical peaks, indicating potential for future growth in gold investments [7][9].

Core Viewpoint - The Federal Reserve is expected to announce a 25 basis point rate cut during its October meeting, lowering the federal funds rate target range to 3.75%-4% with a 99.9% probability according to market expectations [1][2]. Group 1: Rate Cut Expectations - The market anticipates a rate cut, but there may be internal disagreements within the Fed regarding future monetary policy direction due to a lack of economic data caused by the government shutdown [2][5]. - Fed Chair Jerome Powell has expressed concerns about the labor market, indicating a potential consensus for the rate cut, while private sector data shows a decline in employment [2][3]. Group 2: Inflation Concerns - Despite acknowledging risks in the labor market, some Fed officials remain concerned about inflation, with the core CPI rising 3% year-over-year, exceeding the Fed's target by one percentage point [3][5]. - There is a significant divide within the Fed, with some members advocating for immediate rate cuts while others prefer to wait due to inflation risks [3][5]. Group 3: Economic Data Challenges - The government shutdown has created a data void, complicating the Fed's ability to assess the current economic situation, with only limited CPI data available [6][7]. - Analysts expect Powell to communicate uncertainty regarding future policy paths, especially in light of missing employment data [6][7]. Group 4: Balance Sheet Reduction - A key point of discussion is whether the Fed will officially announce an end to its balance sheet reduction, with major banks predicting this could happen during the meeting [8][11]. - The Fed's decision on balance sheet reduction will be influenced by the level of bank reserves, which have recently fallen below $3 trillion [9][11].

Core Viewpoint - Nvidia has made history by becoming the first publicly traded company to surpass a market capitalization of $5 trillion, driven by strong revenue signals released during the recent GTC conference, which exceeded market expectations and fueled bullish sentiment in the market [2][4]. Group 1: Nvidia's Market Performance - Nvidia's stock surged over 5%, pushing its total market capitalization to approximately $5.15 trillion (around 36.6 trillion RMB), with a single-day increase of nearly $270 billion (about 1.9 trillion RMB) [4]. - The company achieved this milestone in just 113 days after crossing the $4 trillion mark, compared to 410 days to move from $3 trillion to $4 trillion [4]. Group 2: Revenue Guidance and Analyst Predictions - Nvidia's CEO Jensen Huang indicated a clear visibility towards achieving a cumulative revenue of $500 billion from data center operations between 2025 and 2026, significantly higher than previous market expectations [4][5]. - Goldman Sachs reported that this revenue target is 12% above the market consensus of $447 billion and 10% higher than their own previous forecast of $453 billion [4][5]. - Analysts believe that the improved visibility on long-term revenue is a positive incremental factor for Nvidia's stock price, with potential for further upward adjustments to their forecasts [5][6]. Group 3: Strategic Partnerships and Investments - Nvidia announced a $1 billion equity investment in Nokia, aimed at accelerating the development and deployment of next-generation AI-native mobile networks and related infrastructure [8]. - The company is collaborating with the U.S. Department of Energy to deploy seven new supercomputer systems at Argonne and Los Alamos National Laboratories, with significant GPU allocations for these systems [8]. Group 4: Federal Reserve's Interest Rate Decision - The market is closely watching the Federal Reserve's interest rate decision, with a consensus expectation of a 25 basis point cut, bringing the federal funds rate target range to 3.75% to 4% [10]. - Analysts anticipate that Fed Chair Jerome Powell may provide insights into future monetary policy directions during the press conference following the rate announcement [10][11].

Housing Market Insights - Pending home sales remained flat at 0% for the month, contrary to market expectations of a 1.6% increase, although the previous month's figure was revised up from 4% to 4.2% [2][3] - Mortgage rates have been decreasing, yet there is a notable increase in contract cancellations, reaching the highest level since 2008, which may be reflected in the current pending home sales [3] - Refinance activity has surged, with a week-over-week increase of 9% and a year-over-year increase of 111%, indicating that lower rates are encouraging homeowners to access equity [5] Mortgage Applications - Total mortgage applications increased by 7.1% week-over-week, with purchase applications rising by 5%, marking a 20% increase year-over-year [5] - The refinancing trend is currently leading the market, but there is potential for first-time home buyers to enter as supply increases and rates continue to decline [6] Federal Reserve and Interest Rates - The market anticipates a 25 basis point rate cut in the upcoming Federal Reserve meeting, with another expected in December [8][9] - Concerns exist regarding the rising unemployment rate and persistent inflation, which may influence the Fed's decisions on rate cuts and quantitative tightening [10] Treasury and Mortgage-Backed Securities - The Fed is currently running off approximately $5 billion in Treasuries monthly, which is a small fraction of typical auction sizes, but is rolling off $30 billion in mortgage-backed securities, which could impact rates if the policy changes [11][12] Earnings Expectations - Major companies like Meta, Microsoft, and Alphabet are expected to report significant capital expenditure increases, with a focus on how they will monetize artificial intelligence projects [15][17] - Meta's ability to generate cash flow and its future spending plans are seen as potential risks, while Alphabet is viewed as well-positioned in the current market environment [17][19]

Group 1 - US Treasury yields saw a slight increase as investors await the Federal Reserve's interest rate decision and potential signals regarding balance sheet reduction [1][3] - The 2-year Treasury yield rose by 0.4 basis points to 3.498%, the 10-year yield increased by 0.6 basis points to 3.989%, and the 30-year yield went up by 0.9 basis points to 4.556% [1] - The market anticipates a nearly 100% chance of a 25 basis point rate cut by the Federal Reserve, bringing the target range to 3.75% to 4% [3] Group 2 - The Mortgage Bankers Association reported a 7.1% increase in mortgage applications, with mortgage rates falling to their lowest level in over a year [3] - The average contract rate for a 30-year fixed mortgage with a balance of $800,000 or less decreased from 6.37% to 6.30% [3] - Refinance demand surged by 9% week-over-week, up 111% compared to the same period last year [3] Group 3 - Analysts expect the Federal Reserve to announce the end of quantitative tightening (QT) soon, with indications that reserve levels may have reached a sufficient point [4][5] - Deutsche Bank analysts noted that the government shutdown has hindered the Fed's ability to track economic data, impacting the focus of upcoming communications [3][4] - The European Central Bank reported a tightening of corporate credit in the Eurozone, particularly among German banks due to economic uncertainties [6] Group 4 - The Nikkei 225 index in Japan rose by 2.17%, reaching a historical high, driven by optimism surrounding US-Japan trade relations and the Fed's anticipated rate cut [8] - Japanese government bond yields mostly increased, with the 2-year yield rising by 1 basis point to 0.947% and the 10-year yield increasing by 1.5 basis points to 1.659% [10]

Core Viewpoint - Barclays anticipates a year-end rally in the stock market due to several factors including cleaner market positioning, seasonal positive influences, resilient corporate earnings, the resumption of share buybacks, and the potential early end to quantitative tightening [1] Group 1 - Market positioning has returned to neutral levels following a correction in October, establishing a healthier foundation for the market [1] - Strong capital inflows in the U.S. market are expected to continue, while sentiment in the EU and UK markets is also improving [1] - Funds chasing corporate performance are likely to favor cyclical stocks as the year-end approaches, creating a favorable environment for further market gains [1]