Core Viewpoint - The U.S. Treasury yield curve is expected to steepen in the coming months due to anticipated Federal Reserve rate cuts, which will lower short-term yields while longer-dated yields remain elevated [1][2]. Treasury Yield Trends - Recent data indicates a decline in Treasury yields, with the benchmark 10-year yield reaching a five-month low, influenced by a weaker labor market and a significant downward revision of job creation estimates [2][4]. - The current 10-year yield is at 4.08%, projected to rise to 4.20% in three months and 4.25% in a year, which is lower than previous forecasts [4]. Rate Cut Expectations - Interest rate futures are now pricing in three 25 basis point cuts from the Federal Reserve this year, an increase from earlier expectations of two cuts [3]. - Analysts predict that the 2-year Treasury yield, currently at 3.55%, will remain stable for six months before declining to 3.40% in a year, leading to a widening spread between 2- and 10-year yields [6]. Market Sentiment - A majority of analysts (85%) anticipate that the U.S. yield curve will steepen by year-end, reflecting a consensus on the direction of interest rates [6]. - The steepening of the yield curve is attributed to a rising term premium, driven by fiscal deficits, tariff uncertainties, and concerns regarding the Federal Reserve's independence [7].

Core Viewpoint - Barclays and Deutsche Bank have raised their year-end targets for the S&P 500, driven by stronger corporate earnings, resilient U.S. economic growth, and optimism surrounding artificial intelligence [1][2]. Group 1: Target Adjustments - Deutsche Bank increased its S&P 500 target to 7,000 from 6,550, while Barclays raised its forecast to 6,450 from 6,050 [1]. - Barclays also lifted its 2026 target for the S&P 500 to 7,000 from 6,700 [4]. Group 2: Market Performance - The S&P 500 has risen 11.2% so far this year and touched a record high of 6,555.97 earlier [1]. - The index has rallied more than 30% from its April lows, supported by resilient earnings and investor enthusiasm around the AI boom [3]. Group 3: Economic Indicators - U.S. job growth weakened sharply in August, with the unemployment rate rising to a near four-year high of 4.3% [3]. - Signs of a cooling labor market and tame inflation have increased expectations for U.S. Federal Reserve rate cuts this year and next [4]. Group 4: Analyst Insights - Analysts expect equity valuations to remain elevated due to higher payout ratios and perceptions of higher trend earnings growth [2]. - Barclays anticipates three rate cuts before year-end, which may help offset labor market weaknesses [4].

Group 1 - Global stock markets rose after U.S. indexes closed at record highs, driven by optimism regarding Federal Reserve rate cuts [1] - U.S. futures for the S&P 500 and Nasdaq increased by 0.3%, while Dow Jones futures declined by 0.1% following the record close [4] - European indexes opened higher, with defense stocks gaining due to geopolitical tensions, particularly after the Russian drone incursion into Poland [5] Group 2 - Novo Nordisk's shares fell by 1.0% after the company downgraded its guidance for the second time in six weeks and announced a workforce reduction of approximately 11% to save $1.3 billion annually [6] - Oracle's shares surged by 29% in premarket trading after securing four multibillion-dollar contracts with three different customers in the quarter ending August 31 [7]

Last Updated: 11 hours ago Gold Sets New Record High. Rate Expectations Are Helping. By CONCLUDED Stock Market News From Sept. 9, 2025: Dow, S&P 500 and Nasdaq All Hit Records Callum Keown Gold continued its march higher into uncharted record territory Tuesday as investors emboldened their bets on Federal Reserve rate cuts. Gold futures rose 0.4% to $3,692, reaching $3,698 at one point, in early trading. The precious metal has climbed 40% so far in 2025. Traders are pricing in a 67% chance of three rate cut ...

Federal Reserve Chair Jerome Powell. - AFP via Getty Images Everyone knows that cutting interest rates is good for the stock market. Or maybe not. As Humphrey Neill, the father of contrarian analysis, liked to say: “When everyone thinks alike, everyone is likely to be wrong.” The stock market’s reaction to Federal Reserve rate cuts is a perfect example. Consider all occasions since 1980 when the Fed cut the target federal-funds rate. In 40% of those cases, the stock market was lower a month later; 37% of ...

Summary of Key Points from the Conference Call Industry Overview - The discussion revolves around the Federal Reserve's monetary policy and its implications for the North American economy, particularly focusing on interest rate adjustments and labor market conditions. Core Insights and Arguments 1. **Forecast for Rate Cuts**: The Federal Reserve is expected to initiate rate cuts starting in September, with a projected 25 basis point (bp) cut as the baseline [1][4][12] 2. **Shift in Fed's Focus**: Chair Powell has expressed increased concern over labor market risks, marking a shift from previous emphasis on low unemployment and persistent inflation [1][4][10] 3. **Rate Cut Projections**: The expectation is for two rate cuts in 2025, with a 25bp cut in September and another in December, followed by quarterly cuts in 2026, targeting a terminal range of 2.75-3.0% [4][17] 4. **Economic Growth and Inflation**: Real GDP growth averaged 1.3% in the first half of the year, with inflation expected to remain above the Fed's 2.0% target due to tariff-related price increases [7][8] 5. **Labor Market Dynamics**: The unemployment rate has remained stable at 4.2%, despite a slowdown in labor demand, indicating a complex balance in the labor market [7][11] 6. **Risks to Employment**: There is a growing concern about downside risks to employment, which could lead to higher layoffs and rising unemployment if materialized [11][12] 7. **Inflation Dynamics**: The Fed is cautious about the potential for tariffs to create lasting inflationary pressures, although current conditions do not suggest a tight labor market [11][12] 8. **Dissenting Opinions**: There may be dissent among Fed members regarding rate cuts, with some members likely to oppose the cuts based on the balance of risks [16] Other Important Considerations 1. **Data Dependency**: The Fed's decision-making will heavily depend on upcoming employment and inflation data, particularly the August employment report [15][19] 2. **Potential for Multiple Cuts**: The updated forecast suggests the possibility of several rate cuts followed by a pause, depending on economic conditions [17][19] 3. **Uncertainty in Economic Outlook**: The evolving economic landscape introduces uncertainty, with the potential for more aggressive cuts if a recession occurs [18][19] 4. **Market Reactions**: The Fed's communication strategy indicates that any adjustments in policy will likely involve more than a single rate cut, signaling a cautious approach [14] This summary encapsulates the key points discussed in the conference call regarding the Federal Reserve's monetary policy outlook and its implications for the economy.

And where are stocks heading from here. Well, we welcome Ed Yardi to Power Lunch. He is founder and head of Ardeni Research.Ed, great to have you on. >> Thank you very much. >> All right.Why do you think the market is not reacting a little more negatively to the hot inflation read and a lowered expectation of more Fed rate cuts in the future. Well, I think the uh market hasn't given up on the idea that the economy is actually resilient, that it doesn't necessarily need lower interest rates and that if we ge ...

Market Trends - Emerging-market currencies experienced a rally following weaker-than-expected US jobs data [1] - Traders are pricing in Federal Reserve rate cuts, leading to a weaker dollar [1]

Summary of Key Points from the Conference Call Industry or Company Involved - The conference call primarily discusses the **U.S. economy** and the **Federal Reserve's monetary policy** outlook, particularly regarding potential interest rate cuts in 2025 and 2026. Core Insights and Arguments 1. **No Rate Cuts Expected in 2025**: The baseline outlook remains for no rate cuts in 2025, with potential cuts only in 2026 as the economy slows and tariff-induced inflation is deemed transitory [8][6][5] 2. **Inflation Forecast**: The forecast anticipates a 3-month annualized rate of PCE inflation at 4.3% in September-October, with year-on-year rates of headline and core PCE inflation at 3.0% and 3.2% by year-end [6][8] 3. **Labor Market Dynamics**: The unemployment rate is projected to remain below 4.5% until Q1 2026, influenced by tighter immigration controls, which may keep labor supply constrained [7][8] 4. **Paths to Rate Cuts**: Five scenarios are outlined that could lead to rate cuts as early as September, including significant declines in payrolls, higher-than-expected breakevens, weak services inflation, and a lack of pass-through to goods prices [23][24][19] 5. **Economic Scenarios**: The report assigns a 40% probability to a baseline scenario of slow growth and firming inflation, with 20% probabilities for upside scenarios and 40% for a mild recession induced by protectionism [12][11] 6. **Impact of Tariffs**: The effective tariff rate is expected to rise, impacting consumer prices and inflation, with a noted shift in the Fed's assessment of risks associated with tariffs over time [60][62] 7. **Consumer and Business Confidence**: Confidence is expected to rebound in 2026, although it remains low due to ongoing uncertainty and sluggish growth [49][48] Other Important but Potentially Overlooked Content 1. **Labor Market Signals**: Current labor market data does not indicate an acceleration in layoffs, but there is concern that the labor market can appear healthy until a downturn occurs [24][31] 2. **Immigration Policy Effects**: Recent immigration policy changes are projected to significantly reduce net immigration, which could further constrain labor force growth and impact breakeven hiring rates [42][41] 3. **Potential for Revisions**: There is a possibility of downward revisions to payroll data, which could signal a more severe labor market downturn than currently reported [30][29] 4. **Consumer Spending Trends**: Consumer spending is expected to slow, particularly in goods, due to tariffs and immigration policies, but a tighter labor market may support spending in 2026 [12][8] 5. **Credit Conditions**: Credit conditions are anticipated to tighten further as the economy contracts, with a gradual loosening expected in 2026 [8][7] This summary encapsulates the key points discussed in the conference call, focusing on the economic outlook, Federal Reserve policy, and the implications of labor market and inflation dynamics.

Market Trends - Gold price steadied, indicating market stability [1] - Gold is set for a moderate weekly loss, reflecting potential downward pressure [1] Monetary Policy - Investors are assessing the outlook for Federal Reserve rate cuts, influencing gold's performance [1]