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 ...

Market Outlook & Fed Policy - The market anticipates a Fed cutting cycle, suggesting a broadening out trade with legs through the end of the year if more cuts occur [2] - Investors should monitor the Fed's summary of economic projections for year-end expectations [2] - The market may react negatively if the Fed signals weakness, especially if hoping for a 50 basis points cut next week [8] - A 25 basis points cut is expected, with increments of 25 unless data deteriorates significantly, with focus on the labor market [5] - The Fed's unemployment rate target is 45%, allowing room for the labor market to cool further [6][7] - The market prefers the Fed to cut due to data alignment with its dual mandate, not out of concern for weakness [9] Investment Strategy - Diversify growth and momentum exposure, considering small caps via equal-weighted S&P exposure [1][3] - Sectors like healthcare, financials, and energy are attractive at current levels [3] - Software companies are the next conduit for AI, presenting buying opportunities on dips due to high valuations [11][12] - AI investment opportunities extend beyond semiconductors, with a long runway in other sectors [12]

Economic Resilience and Inflation - The economy has shown more resilience than expected, with companies reporting stable conditions during the second quarter [2] - Anticipation of the Federal Reserve's actions in September is noted, with a focus on small-cap performance [3] Small-Cap Market Performance - Small caps have outperformed by approximately 400 to 500 basis points since April 8, largely unrecognized in the broader market [4] - Relative valuations for small caps remain cheaper compared to large caps, with small caps yet to reach new highs since November 2021 [5] Earnings Outlook - Small cap earnings turned positive in the second quarter after two years of negative performance, which is crucial for continued outperformance [6] - Expectations are that small cap earnings may outperform large cap earnings in the third quarter [6] Impact of Interest Rates - A lower interest rate environment would benefit small cap companies, particularly those with variable debt [7] - The anticipation of lower rates is already being factored into the small cap market [7] Capital Expenditure Cycle - The recent legislation allowing 100% depreciation on capital expenditures may signal the start of a capex cycle that benefits small cap companies [8] Focus on Industrial Sector - The focus is on economically sensitive areas, particularly industrials, which are expected to benefit from reshoring and re-industrialization in the U.S. [10][11] Historical Context of Small Caps - The Russell 2000's representation as a percentage of the Russell 3000 was 4.2% at the end of the second quarter, a level not seen since the 1980s [12] AI and Market Broadening - The AI narrative is shifting towards beneficiaries of AI, which may drive broader market participation beyond large caps [14]

Market Trends & Sentiment - Tech sector performance is bifurcated, with Alphabet and Apple leading while the rest of the complex lags, indicating potential dispersion in investor sentiment [1][3][4] - Energy and materials sectors have been leading recently, though their impact is limited due to the large size of the tech sector, suggesting a healthy rotation [3] - Large-cap stocks are favored over small-cap stocks [4] Economic Outlook & Jobs Report - The worst of the economy was likely a couple of months prior, coinciding with tariff uncertainties [12] - A jobs report significantly above or below the estimated 75,000 by 10,000 could trigger a market move [11][12] - A much better than expected jobs report might reduce expectations for future Federal Reserve rate cuts [13] - The Federal Reserve is still expected to cut rates in the coming weeks, but potentially not as many times as anticipated over the next 16 months [13] Market Performance & Seasonality - S&P typically pulls back about 2% on average in September based on the last decade's data, indicating seasonality [6] - After the S&P has been up over 25% over 100 days, the average return after one month is 1%, and after three months is approximately 6% [6] - Historically, three months after a similar market condition, the market has been higher 11 out of 11 times, and a year later, up an average of 13% [7] - The strength seen off the lows is inconsistent with a bear market [8] Bond Market & Credit Conditions - The 30-year yield is up around 5%, the highest in a long time, with long-term yields breaking out [9] - Credit markets are showing virtually no signs of stress, with no warnings in high yield or junk bonds, and credit spreads not broadening out [9][10]

And Bryant, that brings us right to you and your valueoriented fund. Um, of course, tech a clear beneficiary from AI and we've heard a lot of talk coming from productivity gains and other sectors from the AI buildout. Where are you seeing value and AI intersect.Is there anywhere where that ven diagram crosses. >> Yeah, sure. We we certainly saw the same thing Todd saw which was financials especially banks were highly attractive coming into the early part of the year and through today within financials we're ...

ETF Market Trends & Flows - Gold ETFs are experiencing significant inflows, hitting record highs and surpassing S&P 500 ETFs in popularity, indicating a potentially bearish market sentiment [1][2] - Equity buying is prevalent, with interest in S&P 500, bonds, and internet ETFs, suggesting a mixed approach of seeking both growth and hedging [3] - Small-cap ETFs are seeing mixed interest, with initial buying followed by quick exits, while fundamentally or factor-weighted approaches are gaining traction [3][11] - Bitcoin ETFs are competing with gold as a store of value, with cumulative flows showing a dynamic race between the two asset classes [4] - Zero-fee funds are attracting the bulk of ETF inflows, with over $300 billion flowing into products costing 10 basis points or less [22] Active vs Passive ETF - Active ETFs are gaining traction, representing close to one-third of overall flows, with firms like Baron entering the space [2][15] - Fees may be less important for active ETFs, as investors prioritize performance and are willing to pay for active management and security selection [16][18] - Vanguard's active mutual funds have outperformed the SPY (S&P 500 ETF) at a higher rate than some peers, attributed to lower fees and less turnover [24][25] - The approval of semi-transparent or non-transparent ETFs was symbolically important but did not necessarily translate into assets [42] Vanguard's Strategy & Position - Vanguard is a leader in low-cost products and is expected to push active ETFs significantly, leveraging its substantial assets under management (approximately $14 trillion to $15 trillion) [20][29] - Vanguard may eventually allow a Bitcoin ETF to capture trends among younger investors [30] - Vanguard's outperformance in active management is linked to lower fees, which allows managers to take less risk and still deliver competitive returns [26][27] Megatrend ETF & Thematic Investing - Lazard Asset Management launched a Megatrends ETF (TMHZ) to capitalize on long-term trends like AI, health, consumer behavior, and data, with a 50 basis points fee [32][35] - Thematic ETFs can fit into model portfolios as tactical themes, and active management may improve client performance in this space compared to passive approaches [38][39] - The goal of megatrend investing is to access long-term themes that will play out over decades, differentiating it from individual themes with shorter lifecycles [40]

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Market Trends & Analysis - Yields are rangebound, indicating a neutral stance from an intermediate and long-term perspective [2] - The 10-year Treasury yield has support around 42% and resistance around 44% [3] - A breakout from the yield range would suggest higher yields, while a breakdown could lead to secondary support around 40% [4] - Small caps, represented by the Russell 2000, show strong upside momentum in both the intermediate and short term [6] - The Russell 2000 exhibits a cup and handle formation, suggesting a potential lift to new highs [6] - Consolidation is expected for small caps, aligning with seasonal influences and overbought conditions [7] - Large cap indices are losing upside momentum, potentially impacting the Russell 2000 [8] - The VIX is above its 50-day moving average, indicating expanding volatility inversely correlated to the S&P 500 [9] Crude Oil Analysis - Crude oil prices are still in a secular downtrend, requiring a substantial upside move to reverse [9] - There are indications on the monthly chart of WTI suggesting a major low in March/April, based on long-term oversold readings [10] Energy Sector - The energy sector shows signs of life, with some MLPs lifting out of prolonged consolidation phases [11] - Phillips 66 (PSX) shows a potential inverse head and shoulders formation, indicating constructive technical action despite long-term downside momentum [11]