What do you make of all four indices, the three major ones in the Russell hitting highs at the exact same time on the day after the Fed rate cut when the day of the rate cut the indices actually closed lower with the exception of the Russell I should say. Historically over this cycle particularly we have seen some very mixed results on the actual day of trading followed by sort of a decisive result. It was a strange SEP and I think that a lot of what happened on Wednesday's trading was trying to decipher so ...

Market Trends & Economic Outlook - The market may see a similar situation to a year ago with potential for rising inflation and two-year Treasury yields around 35%, possibly moving higher [1] - Economic growth alongside rising inflation isn't necessarily negative [1] - Small caps are potentially underowned, with futures short on Russell, suggesting lower rates could benefit them [1] Investment Strategies & Portfolio Allocation - The firm suggests not being long bonds and considering a lower bond allocation, with alternatives like gold for balance [1] - Diversification is crucial, with potential opportunities in international markets (e g, China) and small caps [1] - Consider diversifying from the "Magnificent Seven" (Mag 7) due to their concentrated exposure [1] Individual Stock Picks & Sector Focus - Axon, a maker of body cams and tasers, is highlighted as a potentially good investment with 30% type growth [1] - AI is a significant theme for the next 3-5 years, but diversification beyond chip manufacturers is recommended, including data centers, cooling systems, and energy companies [1][2] Valuation & Risk Management - Overconcentration in a few AI chip names carries significant risk [2] - The traditional valuation game may not always work, as seen with Nvidia and Broadcom, where earnings eventually justified high valuations [1] - Stocks hitting highs often continue to make new highs, while stocks hitting lows can potentially go to zero [1]

Market Outlook & Investment Strategy - Goldman Sachs encourages clients to stay invested and deploy incremental capital over 6-18 months, anticipating potential drawdowns [2] - The market has an 80% probability of experiencing a 10% drawdown, but valuations are not always reliable predictors of market performance [3] - Family offices are looking to decrease cash holdings by 30% over the next 12 months, shifting towards public and private equities [5] - There is significant "right tail risk" in the market, suggesting potential for further upside [7] Economic Factors & Fed Policy - $73 trillion is sitting in money market funds, which could move into risk assets as rates decline [8] - The Fed anticipates a slowdown followed by reacceleration, driven by fiscal and monetary stimulus, and a weaker dollar [9] - Fiscal stimulus is expected to increase cash flow for consumers and corporations [10] AI & Earnings - AI capex has doubled in the last two years, from $150 billion to $300 billion, but remains at 50% of cash flows, unlike the tech bubble [12][13] - The top five stocks have a return on equity (ROE) of 65% and grew over 20% in the first half of the year [14] - The market is more driven by earnings than the overall economy [16] Market Positioning & Sentiment - Client sentiment is mixed, with wealth management clients being neutral to risk-on [4] - Hedge funds are at the 40th percentile of net long positioning, and mutual funds are holding $170 billion in cash, indicating relatively light positioning [6] - The market is expected to hover around current levels until the end of the year, with a moderate upward trend in 2026 [17] Small Caps vs Large/Mid Caps - Small caps have been performing well, but last year the S&P outperformed small caps despite rate cuts and GDP growth [18][19] - Goldman Sachs prefers large and mid-cap stocks [19]

Market Outlook & Strategy - Wells Fargo raised its year-end S&P target to between 6600 and 6800, while anticipating increased volatility [1] - The market has largely priced in the Fed's rate cuts and a relatively stable economy, leaving limited room for further capitalization on this dynamic in the near term [2] - Wells Fargo believes 2026 could be an even better year, given the resolution of fiscal policy and the potential continuation of accommodative monetary policy [3] - The market indicates positive momentum for the remainder of the year and into the next, supporting a bullish outlook [6] Sector Allocation - Wells Fargo is underweight on small-cap stocks, despite their recent outperformance, citing quality degradation and the prevalence of non-earners in the small-cap universe [10] - The idea of rotating from tech to small caps is considered nonsensical, especially given the significant market capitalization difference ($3 trillion vs $28 trillion) [8][9] Economic Indicators - Corporate balance sheets are in a strong position, with high yield spreads at fresh lows [4] - Banks are at all-time highs despite the Fed cutting interest rates, indicating no significant concerns about credit quality or defaults [5]

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]

Well, stocks do typically perform better in the wake of cuts from the Federal Reserve. My next guest has a playbook for how ETF investors can potentially take advantage of any postcut bump. Marissa Anel, Goldman Sachs Asset Management, head of ETF investment strategies, joining me uh now on set for this week's ETF report brought to you by Invesco QQQ.Marissa, thanks for being here. >> Thanks for having me. >> So, I I guess first of all to set the table, we should talk about what the Fed is going to do today ...

Core Viewpoint - A new trend has emerged in the market with small-cap stocks outperforming larger counterparts, indicating a shift in investor appetite towards riskier investments [1][2]. Market Performance - Since August 11th, the Russell 2000 index has gained 8.1%, outperforming the Dow Jones (4.2%), Nasdaq Composite (3.5%), and S&P 500 (3.3%) [3]. - The Russell 2000 has historically been viewed as a bullish economic indicator, as smaller companies are generally more vulnerable during economic downturns [5]. Participation and Trends - The rally in small caps has seen broad participation, with over 150 stocks in the Russell 2000 rising by 25% or more in the past 30 days [6]. - Despite recent gains, the Russell 2000 has lagged behind large-cap peers on a year-to-date and multi-year basis [8]. Economic Context - Recent economic indicators, including weak job data and inflation signs, have led to increased hopes for rate cuts, encouraging investors to take risks on small-cap stocks [2][9]. Notable Small-Cap Performers - Mineralys Therapeutics has seen a 140% increase in shares, with a market value of over $2.6 billion, driven by insider buying and positive earnings [12]. - Vita Coco's shares rose 22% in the past month and 47% over the past year, with a market cap of $2.3 billion, following strong sales growth [13]. - Oklo Inc has gained 21% in the past month and 1300% over the past year, with a market value of $12.8 billion, supported by improved earnings and new project awards [14]. Sector Insights - Many leading small-cap stocks are in the technology sector, benefiting from trends related to the AI revolution [15].

Core Insights - The article provides a market analysis focusing on various investment vehicles including US Small Cap 2000, SPDR® S&P 500® ETF Trust, Invesco QQQ Trust, and iShares Russell 2000 ETF [1] Group 1: Market Performance - The US Small Cap 2000 index has shown significant fluctuations, indicating a volatile market environment [1] - SPDR® S&P 500® ETF Trust continues to be a popular choice among investors, reflecting strong performance in large-cap stocks [1] - Invesco QQQ Trust has demonstrated resilience, driven by technology sector growth [1] Group 2: Investment Trends - There is a growing interest in small-cap stocks as investors seek higher returns amid market uncertainty [1] - The trend towards passive investing is evident with increased inflows into ETFs like iShares Russell 2000 ETF [1] - Market analysts suggest that diversification across these indices can mitigate risks associated with market volatility [1]

Market Outlook & Fed Policy - The market has priced in many positives, leaving room for the Federal Reserve to disappoint next week [2] - The key focus will be on the Summary of Economic Projections (SEP) and the committee's rate guidance for the end of 2026; a convergence with the rates market is needed to avoid disappointment [3][4] - A weakening labor market is a defining macro characteristic, suggesting growth-side risks for the equity market and the need for a bond position [10][11] Investment Strategies - Broadening investment portfolios beyond tech is recommended, considering areas like small caps, energy, and international markets [6][7][8] - Small caps are poised to benefit from declining interest rates due to their floating rate and short-term debt structures, along with less regulation and more M&A activity [7] - Offsetting equity positions with a bond position (duration) is suggested, especially given the potential for a pullback in the second half of September [9] Interest Rate & Bond Market - The market anticipates a 25 basis point rate cut next week [2][3] - The yield curve is positively sloped now, suggesting that rates across the curve should come down as the Fed starts its rate-cutting cycle, unlike the previous year when the yield curve was inverted [16][17] - Expect the 10-year Treasury yield to break below 4%, surprising many due to recency bias related to the bond market's reaction to previous rate cuts [18] Economic Indicators - Despite concerns about the labor market, other data points like GDP growth, company earnings, and consumer strength suggest a continued strong economy [13]

Well, we have been at record highs. Notable today, the 10-year yield near the lowest level since April. So, we're watching all that with the Fed meeting on tap.Will they go 25 or will they go 50. That seems to be the biggest question because the market is convinced nearly 100% you're going to get at least 25. So, Weiss, the question is, what do stocks do.That's question number one for today. JP Morgan's trading desk says this could become a sell the news event. I've heard that from others as well because th ...