Bitcoin could test $120K after Fed rate cut, but traders may need a week to digest impact, with 92% expecting another cut in October.Read more: https://t.co/wX8OhyR1Gg ...

Market Overview - The wheat complex is experiencing weaker trading across three markets, with CBT soft red wheat futures down by 3 to 4 cents, KC HRW futures down by 4 to 5 cents, and MPLS spring wheat futures showing fractional losses [1] - The US dollar index is rising, up by $0.304 to $97.275 following the Fed rate cut [1] Export Sales Report - The weekly Export Sales report indicates accumulated sales (shipped and unshipped) at 13.156 million metric tons (MMT), which is 20% larger than last year and represents a 5-year high for this week [2] - This sales figure accounts for 54% of the USDA wheat export projection and is 1 point ahead of the 5-year average sale pace [2] Futures Prices - As of the publication date, the following futures prices are noted: - Dec 25 CBOT Wheat at $5.21, down 3 1/4 cents - Mar 26 CBOT Wheat at $5.39 1/2, down 3 cents - Dec 25 KCBT Wheat at $5.05 3/4, down 4 1/4 cents - Mar 26 KCBT Wheat at $5.27 3/4, down 4 cents - Dec 25 MGEX Wheat at $5.70 3/4, down 1 cent - Mar 26 MGEX Wheat at $5.91 1/4, down 1/2 cent [2]

Market Performance - The S&P 500 Index closed up +0.48%, the Dow Jones Industrials Index up +0.27%, and the Nasdaq 100 Index up +0.95% on Thursday, with all three indexes reaching new record highs [1][2] - September E-mini S&P futures rose +0.50%, and September E-mini Nasdaq futures rose +0.92% [1] Economic Indicators - Weekly initial unemployment claims fell by -33,000 to 231,000, indicating a stronger labor market than the expected 240,000 [5] - The September Philadelphia Fed business outlook survey rose by +23.5 to an 8-month high of 23.2, surpassing expectations of 1.7 [5] - August leading indicators fell -0.5% month-over-month, which was weaker than the expected -0.2% and marked the largest decline in four months [6] Sector Performance - Semiconductor stocks led the technology sector higher, with Intel surging more than +22% after Nvidia announced a $5 billion investment in the company for co-developing chips [2][12] - Other notable gainers in the semiconductor sector included KLA Corp, ASML Holding NV, and Applied Materials, all closing up more than +6% [12] Company News - CrowdStrike Home closed up more than +12% following an investor briefing discussing its AI strategy and a strong preliminary fiscal 2027 outlook [13] - 89bio closed up more than +85% after Roche announced its intention to acquire the company for $3.5 billion or $14.50 per share [13] - Allstate closed up more than +4% after reporting August catastrophe losses of $168 million, down -8.7% month-over-month [14] - Cooper Companies closed up more than +4% after its board approved a $1 billion increase in its stock buyback program [14] Earnings Reports - FactSet Research Systems closed down more than -10% after reporting Q4 adjusted EPS of $4.05, below the consensus of $4.15, and forecasting 2026 adjusted EPS weaker than expected [15] - Darden Restaurants closed down more than -7% after forecasting 2026 adjusted EPS below consensus [16]

Market Overview - Major averages on Wall Street are reaching all-time highs, with the NASDAQ up about 1% and the small-cap Russell 2000 leading gains with an increase of over 2.5%, marking its first record close since November 2021 [1] - The benchmark 10-year yield increased, reaching 4.14%, reversing a brief drop below 4% [2] Economic Sentiment - David Tepper, President of Appaloosa Management, expressed caution regarding potential interest rate hikes, suggesting that further increases could lead to dangerous territory for the economy [3][5] - Despite the caution, the stock market remains buoyant, with a mixed view on valuations, indicating that average stocks are not cheap [4][6] Job Market Data - Jobless claims showed a decline, providing positive sentiment about the labor market, which supports the notion that the economy is not deteriorating [8] Investment Strategy - The current market environment is described as "Goldilocks," with the Federal Reserve in an easing position and a stable economy, despite high stock valuations [8] - There is a noted divergence between the S&P 500 reaching new highs while 10-year yields have increased, suggesting potential caution for investors if yields rise significantly [10] Sector Performance - A rotation is observed in major tech stocks, with some underperforming despite the overall market gains, indicating a potential shift in investor sentiment [11] - The market may require a period of digestion as valuations reach ceilings, particularly in the workhorse segments of the market [13][14]

Market Outlook - Strategists are adjusting their year-end S&P targets, with one raising it to between 6,600 and 6,800, while also anticipating increased volatility [1] - The market has responded positively to the Fed's decision to lower interest rates, coinciding with a stable economy [2] Economic Conditions - The fiscal landscape is improving, with significant legislation passed, which could lead to a better economic environment in 2026 if monetary policy continues on its current path [3] - Corporate balance sheets are reported to be in a strong position, with high yield spreads at fresh lows [4] Banking Sector - Historically, when the Fed cuts interest rates, banks typically face challenges such as lower credit quality or increased defaults; however, this is not the case currently, as banks are at all-time highs [5] Market Performance - Equal-weighted tech stocks have reached new all-time highs, indicating positive market sentiment for the remainder of the year and into the next [6] - Small-cap stocks are not viewed as the preferred investment vehicle, despite their near-term outperformance due to the current Fed cutting cycle [7] Small-Cap Stocks - The Russell 2000 index, with a market cap of $3 trillion, is significantly smaller compared to the overall $67 trillion US stock market, and the tech sector's $28 trillion market cap [8] - The idea of rotating from tech to small caps is considered nonsensical, as there has been a degradation in quality within the small-cap universe due to private capital acquisition of strong companies [9] - There is a notable presence of non-earners in the small-cap sector, leading to a recommendation to underweight small caps [10]

Group 1 - The Federal Reserve cut rates by 25 basis points and indicated that two more cuts are expected by the end of the year, aligning with the median consensus among the committee [1] - The market's reaction to the Fed's decision may not be immediately clear, and the 25 basis points cut was deemed appropriate [2] - There was a notable absence of dissent from Chris Waller regarding a more aggressive 50 basis points cut, which raises questions about his potential future role as chairman [3][4] Group 2 - The Fed's decision reflects a cautious approach, with some members advocating for more aggressive cuts while others preferred to maintain the current stance [5][6] - The labor market data is influencing the Fed's risk management strategy, suggesting a careful balance between economic stability and proactive measures [5] - The unity among committee members, despite differing opinions, indicates a strategic alignment with Chairman Powell's leadership [7][9] Group 3 - The stock market is experiencing significant growth, with new all-time highs being reached, attributed to favorable policies such as tax reforms and deregulation [10][11] - Since Trump's election, the market has risen approximately 10%, demonstrating resilience even during traditionally weaker periods [12] - The frequency of all-time highs in the stock market is notable, with 7% of all days since 1952 marking such peaks, indicating a strong bullish trend [13]

Federal Reserve Chair Jerome Powell speaks during a news conference following a two-day meeting of the Federal Open Market Committee at the Federal Reserve on September 17.Chip Somodevilla/Getty Images US stocks saw tepid moves after the Fed delivered its first rate cut of the year on Wednesay. Investors had been pricing the cut for weeks, and some on Wall Street predicted it could be a sell-the-news event. The Fed finally gave the stock market what it had been waiting for all year. Too bad it was m ...

Oil prices were little changed on Thursday after the U.S. central bank lowered its key interest rate as widely expected, while an indication of more rate cuts before year-end raised the prospect of a demand boost spurred by falling borrowing costs. ...

Core Viewpoint - The Federal Reserve's recent quarter-point rate cut may not lead to a sustained decline in mortgage rates, as historical trends suggest that mortgage rates can rise even when the Fed cuts rates [1][3]. Group 1: Impact of Federal Reserve Rate Cuts - The Federal Reserve cut its benchmark rate by a quarter-point and indicated the possibility of two more cuts this year, reflecting concerns about the U.S. job market [1]. - Mortgage rates have been decreasing since late July, with the average rate on a 30-year mortgage at 6.35%, the lowest in nearly a year [1]. - A similar trend was observed last year, where mortgage rates fell to a two-year low of 6.08% shortly after the Fed's first rate cut in over four years [2]. Group 2: Historical Trends of Mortgage Rates - Despite the Fed's rate cuts last year, mortgage rates eventually rose, reaching over 7% by mid-January [3]. - The current situation mirrors last year's pattern, indicating that the Fed's rate cut does not guarantee a continued decline in mortgage rates [3]. Group 3: Factors Influencing Mortgage Rates - Mortgage rates are influenced by various factors, including the Fed's interest rate policy and bond market investors' expectations regarding the economy and inflation [4]. - The 10-year Treasury yield serves as a benchmark for mortgage rates, as mortgages are often bundled into mortgage-backed securities that compete with these government bonds [5]. - When the yield on 10-year Treasury bonds rises, mortgage rates typically increase, and vice versa [5].

Core Viewpoint - The Federal Reserve's recent decision to implement a hawkish cut was largely anticipated by the market, indicating a balanced approach to its dual mandate despite concerns about the labor market [1][5][14] Market Reactions - The stock market closed flat following the Fed's announcement, with the 10-year yield also remaining stable, suggesting a lack of volatility in response to the news [6][8] - Over the past three months, the S&P has increased by approximately 10%, while gold prices have risen by 11%, indicating a unique market dynamic where both asset classes are performing well simultaneously [7] Interest Rate Expectations - Market expectations had priced in a 25 basis point cut, with speculation for additional cuts in the future, particularly three consecutive cuts [2][8] - There is a belief that the Fed may become more dovish as it approaches May 2026, when current Chair Powell's term ends, potentially leading to louder dissent among members [9] Economic Indicators - Upcoming inflation readings, particularly the PCE data, are anticipated to influence market sentiment and could be a source of concern for investors [6] - The Fed's message was interpreted as an "insurance cut," rather than the beginning of a new cutting cycle, reflecting ongoing worries about inflation [14]