The Fed cut rates for the first time this year and penciled in two more for next year, pointing to growing signs of weakness in the US labor market https://t.co/PtpdLlvm66 ...

Market Outlook - 314 Research maintains its S&P 500 target of 6,800 for 2025, approximately 2% from current levels [1] - The equity market experienced two positive developments from the Fed this week, supporting a continued long position in the bull market [2] - A potential growth scare, with an estimated one-third chance of occurring in the coming months, could lead to a 7-8% pullback in the equity market [9] - In a growth scare scenario, the 10-year Treasury yield could potentially drop below 350 basis points (35%), although this is not the base case [11] Fed Policy & Economic Indicators - The market had priced in more rate cuts than the Fed signaled in June, setting a high bar for the Fed to clear [3] - Instances where the Fed moves slightly towards market expectations after high expectations have historically been positive for equities in the following quarter [4] - The Fed is effectively lowering the real Fed funds rate (nominal Fed funds rate minus inflation projections) across 2025-2027 [6] - The Fed may be more concerned about the labor market than they are letting on, potentially anticipating a larger left tail risk [16][17] Portfolio Strategy - 314 Research is pressing longs into year-end, paired with an overweight bond position [10] - Investors should prepare their portfolios for potential risks, particularly related to growth concerns [17] - During a growth scare, equities tend to experience increased volatility, with potential drawdowns, while bonds rally [9][16]

Market Overview - The economy and inflation are likely to run warm to hot, creating a bifurcated market [1][2] - The Fed wants the economy to do well and has the opportunity to cut rates if needed, supporting the environment [3] Investment Opportunities - Opportunities exist in stocks that benefit from pricing power and are not overleveraged, especially with low valuations [2][3] - Focus on finding undervalued pockets likely to outpace inflation due to their ability to raise prices [3] Specific Sectors of Interest - Autolevered stocks and consumer discretionary retail are interesting sectors [5] - Auto OEMs are managing tariffs better than anticipated, with strong demand despite high prices [5] - Auto dealers benefit from a strong market and 40% of their volumes in parts and service, with low valuations [7] - Multiple retailers in consumer discretionary, including apparel and jewelry retail, are in turnaround situations with low valuations [8] Risk Considerations - Cost pressures from tariffs and inflation are already priced into some stocks [4][8] - Concerns over high auto prices exist, but demand remains strong [5]

Market Overview - The market experienced a strong week, particularly for small-cap stocks, with the Russell 2000 hitting a new record high [1] - The Federal Reserve's interest rate cut of a quarter point provided a boost to the market [1] - Earnings remain strong, suggesting a potential "Goldilocks" economy [1] Investment Strategy - Citigroup recommends a barbell strategy, favoring growth with a cyclical bias [3] - As the Fed eases further, a shift towards small and mid-cap stocks (SMID) is suggested, anticipating an earnings recovery into 2026 due to Fed stimulus [4] - Pullbacks should be aggressively bought into, expecting a strong finish to the year [8] Earnings Analysis - Earnings growth is broadening beyond AI-related companies, with evidence seen in Q2 and expected to continue in Q3 [5] - The S&P 500's capitalization is roughly split, with half attributable to AI-related companies and the other half to economic-sensitive and defensive sectors [6] - Expectations for Q3 earnings are high, requiring strong performance to meet the raised bar [8] S&P 500 Outlook - Citigroup has reached its initial year-end target of 6,600 for the S&P 500 and has a "Super Bowl case" target of 7,200 [8] - Achieving the 7,200 target requires 2026 earnings estimates to increase beyond Citigroup's current estimate of $38 per share for the S&P 500 [9] - The S&P 500's fundamental backdrop is structurally in good shape [11]

US stocks are trading near record highs after the Federal Reserve lowered interest rates by 25 basis points on Wednesday. Queens' College Cambridge president Mohamed El-Erian, IBM's Vice Chair Gary Cohn, Former Federal Reserve Bank of Cleveland CEO and president Loretta Mester and Senator Elizabeth Warren (MA-D), EY Parthenon chief economist Gregory Daco and J.P. Morgan's Asset Management global market strategist Merra Pandit weigh in on Fed rate cuts and the impact on markets. To watch more expert insights ...

Uh, let's stick with housing. Our next guest says this week's rate cut will spike housing demand, particularly from first-time buyers, but warns that could also drive prices back up. Joining us now is Noble Black, real estate broker at Cork Noble.Great to have you with us. >> Thanks for having me. >> Um, are you expecting rates to resume a downward sort of trajectory even though we saw a spike right after the Fed meeting.>> Who knows, right. I mean, I I think we're certainly not going to see them fall drama ...

We got the first Fed rate cuts in almost a year. Thanks, Powell. December 2024 was the last time they did it. They cut it on the 25 basis points.So, it was pretty much as prediction markets predicted. Want to look at the the Fed fund rates over the a 10-year time horizon even longer. So, we've been up in the five range all the way from 2023 and then it sort of started to drop in the end of 2024 and then we've been hovering at this uh 4.25% range and now we're down another 25 basis points.So, it's not the 50 ...

We got the first fed rate cuts in almost a year.December 2024 was the last time they did it.Not the 50 bps some wanted.But pretty much what prediction markets expected. https://t.co/k5zbcyuG6w ...

And he joins us now first on CNBC, newly confirmed Fed Governor Steven Myron. Our Steve Leeman, of course, also with us. It's great to see you, Mr.. Governor. First of all, congratulations on the confirmation and getting inside the Fed. Thank you and thanks for having me back.It's great to see you. Well, I I'm glad that you're here because I think a lot of people want to know why you desented first of all for 50 basis point cut when the rest of the committee voted on quarter point. Yeah, of course.Look, you ...

The Fed just kicked off its first rate cut of the year, a quarter point, and hinted at two more rate cuts to come in 2025. That would bring rates down to between 3.5% to 3.75% by year end. The dot plot, which maps out where policy makers expect interest rates to head in the future, show that nearly all FOMC officials anticipated some sort of easing with just one official seeing no change.Most expect three rate cuts, some forecast two, and one even anticipate six cuts. So, lots of dispersion among the commit ...