Federal Reserve Governor Michelle Bowman says inflation is close enough to the central bank's target to justify more interest rate cuts at a Psaros Center for Financial Markets and Policy event at Georgetown University. ...

Often, stocks that start trading near highs can confuse investors into thinking that they will not see any further upside in the future, assuming that all the bullish and good news has already been priced in at these levels.  However, as momentum builds for a company, more financial and fundamental expansion usually follows. Also, it may trigger additional institutional buying as many rely directly on momentum strategies. Spotify Technology TodaySPOTSpotify Technology$708.96 -9.99 (-1.39%) 52-Week Range$36 ...

Market Performance - U.S. stocks experienced a decline for the third consecutive day, with the S&P 500 falling 0.5%, marking its longest losing streak in over a month [1] - The Dow Jones Industrial Average decreased by 173 points, or 0.4%, while the Nasdaq composite also dropped 0.5% [1] Economic Indicators - Reports indicate that the U.S. economy may be stronger than previously anticipated, which could reduce the likelihood of the Federal Reserve cutting interest rates multiple times in the near future [2] - A stronger economy could diminish the urgency for the Fed to implement rate cuts, especially given the risk of exacerbating already high inflation [4] Federal Reserve Actions - The Federal Reserve recently executed its first rate cut of the year, with expectations for additional cuts through the end of next year, which had been a significant factor in driving U.S. stock prices to record levels since April [3] - The market's optimism hinges on the U.S. economy maintaining a balance that is slow enough to justify rate cuts but not so weak as to trigger a recession [5] Treasury Yields - Treasury yields increased as traders adjusted their expectations regarding the number of forthcoming rate cuts by the Fed, with the yield on the 10-year Treasury rising to 4.17% from 4.16% [6] Employment Data - A report indicated that fewer U.S. workers filed for unemployment benefits last week, suggesting a potential slowdown in layoffs [6] - Additional reports revealed that the U.S. economy grew at a faster pace during the spring than previously thought, and orders for U.S. manufactured goods exceeded economists' expectations [7]

Economic Context - The US Federal Reserve lowered interest rates by 0.25 percentage points, establishing a new target range of 4% to 4.25% [1] - The Fed is anticipated to continue lowering rates through the end of 2025, indicating a shift in the global interest rate cycle [1] Frasers Logistics & Commercial Trust (FLCT) - FLCT's distribution per unit (DPU) fell by 13.8% year on year to S$0.03 in the first half of fiscal year ending 30 September 2025 due to high borrowing costs [3] - Lower interest rates are expected to reduce FLCT's financing expenses and stabilize its DPU [3] - FLCT's gearing ratio was 36.8% as of 30 June 2025, well below the regulatory threshold of 50%, providing room for future acquisitions [4] - The trust's logistical and industrial assets have a weighted average lease expiration (WALE) of 4.6 years and a 96.7% occupancy rate [4] - FLCT's portfolio occupancy rate decreased by 1.4 percentage points quarter-on-quarter to 92.5%, but is expected to improve following the divestment of underperforming assets [5] Mapletree Pan Asia Commercial Trust (MPACT) - MPACT, formed through the merger of Mapletree Commercial Trust and Mapletree North Asia Commercial Trust, has a diversified asset base across multiple countries [6] - MPACT's DPU fell by 3.8% year on year to $0.0201 in the first quarter of fiscal year 2025/2026 due to negative rental reversions in its overseas portfolios [7] - The trust has a manageable gearing ratio of 37.9% as of 30 June 2025, which helps mitigate financing cost sensitivity [7] - MPACT achieved an overall portfolio rental reversion of 1.4%, with VivoCity in Singapore showing a 14.7% uplift [7][8] - However, overseas markets faced challenges, with rental reversions declining by 19.4% in China and 7.9% in Hong Kong [8] City Developments Limited (CDL) - CDL is one of Singapore's largest property developers, with a diversified portfolio across residential, commercial, and hotel sectors [9] - Lower interest rates are expected to enhance mortgage affordability and boost property demand, benefiting CDL's hotel segment amid a global travel recovery [9] - CDL's revenue for the first half of 2025 increased by 8% year on year to $1.68 billion, driven by strong property development performance [10] - The company reported a 10% year-on-year decline in profit before tax to S$139.9 million due to net foreign exchange losses and reduced divestment gains [10] - CDL maintained a strong capital position with cash reserves of S$1.8 billion and total cash and undrawn committed bank facilities of S$3.5 billion [11] - The Singapore office portfolio achieved a committed occupancy of 97%, outperforming the island-wide rate of 88.6% [11] - The retail portfolio also performed well with 97% occupancy and a 12.8% rental reversion [12] - A special interim dividend of $0.03 per share was declared for 1H2025, reflecting a commitment to shareholder returns [12] Investment Implications - Interest rate cuts are expected to provide significant benefits for Singapore REITs and property developers, particularly those with higher gearing levels [13] - Lower borrowing costs will enhance distributable income and support higher asset valuations as cap rates compress [13] - Investors are advised to focus on companies with strong occupancy rates, quality assets in prime locations, and reputable sponsors [14] - Companies that combine operational excellence with strategic leverage will be well-positioned to capitalize on declining rates [14] - Singapore blue-chips such as FLCT, MPACT, and CDL are expected to see meaningful gains from lower financing costs and stronger valuations [15]

On this episode of Market Sense, we’re discussing the Fed’s first interest rate cut of the year—what it means, why it matters, and how it could affect stocks and bonds. Plus, we're watching the latest efforts in Washington to avoid a government shutdown. Topics covered: • Federal Reserve • Rate cut • Labor market • Inflation 00:00 Market Sense Introduction 01:25 Latest market news 03:16 Potential government shutdown 05:31 What is the Fed’s focus right now? 07:10 Dot plot and plans for more cuts 08:44 The Fe ...

US stocks fell on Wednesday as Wall Street digested mixed messaging from Fed officials on interest rates. The S&P 500 (^GSPC) slid 0.3% while the Dow Jones Industrial Average (^DJI) declined by about 0.4%, The tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%. The declines marked a reversal from the indexes' earlier gains. Debate over the prospects for US interest rate cuts — the big focus for markets right now — appeared to pressure stocks. Comments from Federal Reserve officials this week have hinted a ...

Economic Outlook - The Federal Reserve, led by Jay Powell, is facing a challenging economic environment with rising unemployment and inflation above the 2% target, leading to two-sided risks in the economy [1][24] - Equity prices are considered fairly high, indicating a potential asset bubble, yet the stock market has seen significant gains since the Fed's rate cuts, with expectations for more cuts by year-end [1][9][27] Market Dynamics - Historical data suggests that if the Fed implements four to five rate cuts over the next 12 months, the S&P 500 could rise by 16.1% during an economic expansion [4] - There is a concern that lowering interest rates could exacerbate asset bubbles across various sectors, including real estate and technology [10][18] Housing Market - The housing market has been significantly impacted by high interest rates, with $35 trillion of wealth trapped in home equity, which could lead to a boom once rates decrease [6][11] - There is a debate about whether lowering rates will lead to increased housing supply and subsequently lower prices, with differing opinions on the potential market dynamics [13][14] Investment Sentiment - Investors are increasingly using platforms like Robinhood to trade, driven by the need to cope with high inflation and seek returns in a challenging economic environment [24] - Despite concerns about overvaluation, there is a significant amount of capital still being invested in stocks, suggesting a disconnect between market performance and underlying economic fundamentals [22][23] Small Cap Performance - Small-cap stocks are projected to have a 35% earnings growth next year, trading at lower multiples compared to larger companies, indicating potential undervaluation in this segment [27][28] - The refinancing risk for small caps is highlighted, as lower rates could lead to increased valuations and market performance for these companies [28]

Core Viewpoint - JPMorgan's shares reached an all-time high of $316.31, driven by optimism regarding the easing rate cycle and a strong capital return momentum, including a $50 billion buyback and a 7% dividend increase [1][10][18]. Group 1: Stock Performance - JPMorgan's stock has gained 30.4% year-to-date, outperforming the S&P Index's 14.1% increase [1]. - In comparison, Bank of America and Citigroup saw stock increases of 17.6% and 46.3%, respectively, during the same period [1]. Group 2: Net Interest Income (NII) Outlook - JPMorgan's balance sheet is highly asset-sensitive, and the anticipated Fed rate cuts may exert downward pressure on NII, projected to be $95.5 billion in 2025, reflecting over 3% year-over-year growth [5][6]. - The bank's NII recorded a five-year CAGR of 10.1%, primarily due to high-interest rates since 2022 and the acquisition of First Republic Bank [7]. - Other banks like Bank of America and Citigroup also expect modest NII declines but project growth in 2025 driven by strong loan demand [8]. Group 3: Non-Interest Income and Fee Income - Lower borrowing costs from rate cuts are expected to revive corporate financing activity, enhancing JPMorgan's advisory and underwriting fees [12]. - The bank's trading revenues are likely to benefit from increased client hedging and speculative activity due to market volatility [13]. - JPMorgan's asset management business is anticipated to see rising assets under management and higher fee revenues as markets rally [14]. Group 4: Branch Expansion and Acquisitions - JPMorgan operates 4,994 branches, the most of any U.S. bank, and plans to open 500 more by 2027 to enhance relationship banking [15][16]. - The bank has also expanded through strategic acquisitions, including a larger stake in Brazil's C6 Bank and the purchase of First Republic Bank [16]. Group 5: Financial Strength and Capital Returns - As of June 30, 2025, JPMorgan had total debt of $485.1 billion and cash and deposits of $420.3 billion, maintaining strong liquidity [17]. - The bank has consistently rewarded shareholders, increasing its quarterly dividend by 7% to $1.50 per share and authorizing a $50 billion share repurchase program [18][19]. Group 6: Asset Quality and Credit Performance - Lower interest rates are expected to improve asset quality by easing debt-service burdens, particularly benefiting variable-rate consumer and corporate loans [21]. - JPMorgan anticipates a card net charge-off rate of approximately 3.6% for 2025, indicating stable credit performance [22]. Group 7: Valuation and Earnings Estimates - JPMorgan's stock is trading at a forward P/E of 15.55X, above the industry average of 15.25X, indicating a stretched valuation [23][25]. - Earnings estimates for 2025 and 2026 have been revised upward, reflecting bullish analyst sentiments [25][26].

Market Overview - Futures for the S&P 500 and Nasdaq showed slight increases as investors reacted to cautious comments from U.S. Federal Reserve Chair Jerome Powell and anticipated key economic data later in the week [1][3] - Powell's remarks highlighted concerns about asset prices being highly valued and the delicate balance the Fed must maintain between inflation risks and a softening labor market [2] Economic Indicators - Investors are focused on the upcoming core personal consumption expenditures data, which is the Fed's preferred inflation measure; a higher-than-expected reading could lead to a more cautious easing approach, while a lower reading might support further cuts [5] - Housing market data is also being monitored for insights into consumer demand and builder sentiment, particularly in light of high borrowing costs affecting affordability [5][6] Stock Performance - Lithium Americas' U.S.-listed shares experienced a significant surge of 67% following reports that the Trump administration was considering taking up to a 10% equity stake in the company [7] - Concerns about inflated stock valuations persist, with only 17% of S&P 500 stocks outperforming the index in the last three months, indicating a narrow breadth in the market rally [4]

Core Insights - Circle's stock price is under pressure, having dropped 56% from its peak this year, as investors evaluate the implications of the Federal Reserve's interest rate cuts on its revenue [3][6] - Tether's valuation is projected to reach $500 billion due to a capital raise of $20 billion for a 3% stake, positioning it as one of the largest private companies globally [4][6] Company Comparisons - Tether's valuation of $500 billion represents a multiple of 2.7x its assets, while Circle's market cap stands at $30 billion, reflecting a multiple of only 0.4x its USDC assets [7] - Tether and Circle operate under different business models; Tether's USDT is not audited by a Big Four firm, while Circle's USDC is backed by fiat and short-term treasuries [7][8] - Tether retains all profits, whereas Circle has a partnership with Coinbase that allows Coinbase to keep 100% of the interest income from USDC held on its platform [8] Market Dynamics - The Federal Reserve's interest rate cuts are expected to have a more significant impact on Circle, which relies on short-term US bonds, compared to Tether, which has a more diverse asset base that includes Bitcoin and gold [8] - Circle's stock price has seen a significant decline, moving from a high of $298 to a current price of $130, with resistance at $148 and a potential target of a year-to-date low of $107 [9][10]