Core Viewpoint - The U.S. Federal Reserve's decision to restart interest rate cuts is expected to benefit housing shares and other interest-rate sensitive sectors, as markets anticipate more monetary easing [1][2]. Group 1: Impact of Federal Reserve's Actions - The Fed lowered its benchmark rate for the first time since December, reducing it by a quarter of a percentage point to the 4-4.25% range, which is aimed at supporting a shaky labor market [1][2]. - The move is anticipated to help small-cap and consumer discretionary shares, with homebuilder stocks likely to benefit from lower mortgage rates and increased economic activity [2][5]. Group 2: Market Performance - The S&P 500 reached record high levels, up over 13% year-to-date, while the small-cap Russell 2000 also posted a record-high close for the first time in nearly four years [2]. - The PHLX Housing index has increased by 15% this quarter, outperforming the S&P 500's over 7% gain, although it still lags behind on a year-to-date basis [3]. Group 3: Notable Stock Performances - Significant gainers in the housing sector this quarter include DR Horton, which is up over 30%, and both KB Home and Toll Brothers, which are up over 20% [4]. - Home improvement retailers Lowe's and Home Depot have also seen increases of about 20% and 13% respectively this quarter [4]. Group 4: Mortgage Rates and Housing Market Conditions - The contract rate on a 30-year fixed-rate mortgage fell to 6.39%, the lowest since early October 2024, with projections suggesting it could approach 6% by year-end [4]. - Despite the positive outlook from lower mortgage rates, the housing market is currently struggling, with single-family homebuilding hitting a near 2-1/2-year low in August [5].

Monetary Policy and Economic Outlook - The U.S. Federal Reserve cut interest rates by 25 basis points for the first time this year, indicating a shift towards monetary easing and expecting two more cuts by year-end [1][9] - Despite inflation remaining above the 2% target, the increase in the unemployment rate has pressured policymakers to focus on supporting economic growth [2] - The Fed has raised its projections for economic growth this year, with expectations for higher growth next year [2] Investment Opportunities - Investors are encouraged to design their portfolios to capitalize on the improving economic scenario, with broker-adored stocks such as CVR Energy (CVI), Asbury Automotive Group (ABG), American Axle & Manufacturing Holdings (AXL), General Motors Company (GM), and Adient plc (ADNT) highlighted for potential returns [3][9] - A screening process has been developed to shortlist stocks based on improving analyst recommendations, upward estimate revisions, and low price/sales ratios [4][5] Stock Screening Criteria - The screening parameters include net upgrades in analyst ratings over the last four weeks, earnings estimate revisions, and a focus on companies with lower price/sales ratios [5][6] - Additional criteria include a current price greater than $5, an average daily volume exceeding 100,000 shares over the last 20 trading days, and a market value in the top 3000 stocks by market capitalization [6] Company Profiles - CVR Energy is involved in renewable energy and petroleum refining, committed to developing renewable biofuels [7] - Asbury Automotive Group has a diversified product mix and is leveraging its e-commerce platform, Clicklane, for growth [8][10] - American Axle is advancing in the electric drive space, enhancing its market position through collaborations [11][12] - General Motors remains the top-selling U.S. automaker, driven by strong demand for its vehicles and a robust electrification strategy [13][14] - Adient is a leading automotive seating supplier with a diverse customer base and strong market presence [14][15]

RT CoinDesk Indices (@CoinDeskMarkets)“Recent economic data suggests that risk assets are reaching new highs even in the absence of monetary easing, yet the real story isn’t cyclical, it’s structural,” says Adam Guren of Hunting Hill Global Capital.https://t.co/Z8qZGaa9me ...

Monetary Policy - Bank of Canada cut interest rates [1] - The cut is a response to economic and labor market damage from US tariffs [1] - The bank remained vague about future monetary easing plans [1]

Corporate Sector Focus - U.S. corporate sectors sensitive to interest rates are in focus as the Federal Reserve is poised to lower borrowing costs for the first time this year, following hints from Chair Jerome Powell [1][2] - Traders have priced in a 25 basis points rate cut and expect two more cuts by the end of 2025, contributing to record highs in U.S. stock markets, particularly in technology and bank stocks [2] Small Caps - Small-cap companies rely heavily on external borrowing, and lower borrowing costs will increase their available capital, allowing them to refinance existing debt more cheaply [3] - The Russell 2000 small cap index has rallied over 5% since Powell's comments on August 22, although it remains below its record high from November 2021 [4] Banks - The banking sector faces a complex situation; while lenders benefit from rising interest rates, increased competition for deposits may lead to higher funding costs, impacting profits [5] - The spread between two-year and 10-year Treasury notes reached its steepest since April but has reversed some gains recently due to soft labor market data [6] - The KBW regional banking index has gained about 1.4% since Powell's dovish comments, while the S&P 500 banks index has increased nearly 5% [6] Growth Stocks - Interest rate cuts are expected to boost growth and technology stocks, as lower rates enhance the present value of future earnings, benefiting companies anticipated to grow at an above-average rate [7]

Core Insights - The Federal Reserve is anticipated to announce its first interest rate cut of the year, with expectations of a 25 basis point reduction, bringing the policy rate to 4.00-4.25% [2][9] Economic Context - Recent data indicates a weakening U.S. economy, characterized by slower hiring and a rising unemployment rate, which suggests a softening labor market [6] - Inflation remains above the Federal Reserve's 2% target, but increasing unemployment pressures policymakers to shift focus towards supporting growth and financial stability [7] Impact on Banks - The expected rate cuts are likely to stabilize banks' funding costs and support net interest income (NII) expansion, a critical earnings driver for banks [8] - Lower benchmark rates may compress yields on loans and securities, but easing funding pressures can help preserve margins [8] - A rate cut is expected to make refinancing more affordable, reducing default risks and improving credit quality for banks [10] Bank-Specific Insights M&T Bank (MTB) - MTB's NII has a compounded annual growth rate (CAGR) of 15.4% over the past four years, with projections for NII to rise to $7.05-$7.15 billion in 2025 from $6.85 billion in 2024 [11][12] - The bank expects average loans and leases to be between $135 billion and $137 billion in 2025, with total deposits projected at $162-$164 billion [13] - The Zacks Consensus Estimate for MTB's earnings implies year-over-year increases of 10.9% and 13.7% for 2025 and 2026, respectively [14] Bank OZK (OZK) - OZK's NII rose in the first half of 2025, with expectations for continued improvement [17] - The bank has experienced a 10.8% revenue CAGR from 2019 to 2024, driven by loan growth and higher fee income [18] - The Zacks Consensus Estimate for OZK's earnings implies year-over-year rises of 3.6% and 5.9% for 2025 and 2026, respectively [19] Texas Capital Bancshares (TCBI) - TCBI's NII has a CAGR of 4.1% over the past three years, with expectations for continued growth due to rate cuts and improving loan demand [22] - The bank is advancing its strategic plan to improve efficiency and diversify revenues, including acquiring a $400 million healthcare loan portfolio [23] - The Zacks Consensus Estimate for TCBI's earnings implies year-over-year increases of 39.1% and 11.4% for 2025 and 2026, respectively [25]

Market Overview - U.S. equities are experiencing strong upward momentum, with major indexes rising as investors anticipate a Federal Reserve interest rate cut later this week [1][2] - The S&P 500 (SPX) has climbed 0.4%, while the Nasdaq Composite (IXIC) is up 0.5%, both nearing new record highs [2] - The Dow Jones Industrial Average (DJIA) has increased by 43 points, or 0.1%, contributing to the overall positive market sentiment [2] Federal Reserve Focus - The Federal Open Market Committee (FOMC) meeting is the primary focus for market participants, concluding on September 17, 2025 [3] - A 25-basis-point cut in the federal funds rate is widely expected, with the current rate between 4.25% and 4.50% [3] - Investors will closely monitor the updated FOMC members' projections for future interest rate paths through 2026 and 2027 [3] Economic Data Releases - Key economic data releases this week include the Empire State Manufacturing Index, U.S. industrial production, and retail sales data [4] - Additional indicators from the UK and Eurozone will also be observed to shape expectations for future monetary policy [4] Major Stock Movements - Tesla (TSLA) shares surged between 7.2% and 8.5% after CEO Elon Musk disclosed a $1 billion stock purchase, indicating strong insider confidence [5] - Nvidia (NVDA) shares declined by 1.5% to 1.6% following accusations from China regarding antimonopoly law violations related to its acquisition of Mellanox Technologies [5] - Alphabet (GOOGL, GOOG) shares rose over 3%, surpassing a $3 trillion market capitalization, making it the fourth company globally to achieve this milestone [5] - Intel (INTC) shares increased over 4% after trimming its 2025 expense outlook following the sale of its Altera stake [5] - Warner Bros. Discovery (WBD) shares surged by 16.7% amid reports of a potential bid from Paramount Skydance Corporation [5] - RH (RH) shares fell by 4.6% after reporting second-quarter fiscal 2025 earnings that missed estimates [5] - Super Micro Computer (SMCI) gained 2.4% after announcing large-scale shipments of its Nvidia Blackwell Ultra systems [5] Corporate Developments - California Resources Corporation (CRC) and Berry Corporation (BRY) announced an all-stock combination valued at approximately $717 million [9] - Automotive supplier Magna (MGA) secured a significant vehicle assembly deal with XPENG for two new electric vehicle models [9] - Montrose Environmental Group (MEG), Great Lakes Dredge & Dock (GLDD), and KT Corporation (KT) were highlighted as strong buy growth stocks [9]

Canada’s currency is poised to benefit from a smaller interest-rate gap with the US as the nation’s central bank nears the end of its monetary easing cycle while the Federal Reserve gears up for multiple cuts https://t.co/I3Cycl92iE ...

The Bank of Russia opted for a smaller interest-rate cut than expected, despite calls for more aggressive monetary easing https://t.co/jAcTxBoQ3V ...

Market Sentiment - Renewed optimism around ongoing trade negotiations between India and the U.S. has lifted market sentiment, with expectations of stronger H2 FY26 earnings driven by GST rationalization and monetary easing benefits [1][14] - The IT index has outperformed due to hopes of a potential Fed rate cut and a revival in technology spending, with investors focused on the progress of India-U.S. trade talks for constructive resolutions to tariff-related issues [2][14] U.S. Market Performance - The S&P 500 and Nasdaq reached intraday record highs following cooler-than-expected inflation data, which kept the U.S. central bank on track to cut borrowing costs this year [6][14] - U.S. producer prices unexpectedly fell in August, leading traders to increase bets on interest-rate cuts, with a 90% probability for a 25-basis-point reduction at the upcoming Federal Reserve meeting [7][14] Company Highlights - Oracle's stock surged 41% to a record high, marking its largest one-day percentage gain since 1992, after announcing expectations for booked revenue at its Oracle Cloud Infrastructure business to exceed half a trillion dollars [7][14] - Waaree Energies, HDFC Bank, and Kotak Mahindra Bank were among the most active stocks in terms of turnover on the BSE, indicating high trading activity [9][15] Technical Analysis - The Nifty index gained over 100 points, closing at 24,979, supported by a bullish crossover in the RSI above 50, indicating positive momentum [8][15] - Sustaining above the levels of 24,820–24,750 may lead the index towards 25,160 and higher levels, while support remains at the same lower range [8][15] Stock Activity - Over 118 stocks reached their 52-week highs, including Muthoot Finance, Bosch, and Maruti Suzuki, while 53 stocks hit their 52-week lows [12][15] - Stocks showing strong buying interest included Oracle Financial Services Software, Welspun India, and Vardhman Textiles, while significant selling pressure was observed in stocks like NTPC and Tata Motors [11][13][15]