The dollar index (DXY00) recovered from a 1.5-week low today and is up by +0.16%.  The dollar is rallying on today's better-than-expected US Jan payroll report, which pushed T-note yields higher and dampened speculation of additional Fed interest rate cuts.  The chance of a Fed rate cut at next month's FOMC meeting fell to 6% from 23% before the release of today's monthly payroll report.  Hawkish comments today from Kansas City Fed President Jeff Schmid also supported the dollar when he said the Fed should ...

Core Viewpoint - Small-cap stocks and related ETFs are showing positive momentum as 2025 concludes, indicating potential investment opportunities, particularly in the WisdomTree US Smallcap Quality Dividend Growth Fund (DGRS) [1] Group 1: Performance and Volatility - DGRS has outperformed the S&P SmallCap 600 Index over the past three years while exhibiting slightly lower annualized volatility [2] - The quality characteristics and favorable volatility traits of DGRS are expected to remain resilient in various economic conditions [3] Group 2: Economic Indicators and Federal Reserve Impact - Weakness in the labor market may prompt the Federal Reserve to continue lowering interest rates in 2026, with recent data showing inflation cooling to 2.7%, a four-year low [4] - The Fed's actions to support the economy are particularly relevant for DGRS, which allocates over 25% of its weight to financial services stocks, benefiting from increased demand for financing and corporate transactions [5] Group 3: Historical Context and Valuation - Historically, small-cap stocks have outperformed large-cap stocks in the months following Federal Reserve interest rate cuts, suggesting potential upside for DGRS in 2026 [6][7] - The S&P 600 is currently trading at over 15 times forecasted earnings, which is 30% lower than the S&P 500's valuation of over 22 times, indicating that small-cap stocks remain attractively valued [8]

Core Viewpoint - The discussion focuses on three major tech stocks: Alphabet, Nvidia, and Oracle, highlighting their recent performance, market dynamics, and investment potential amid a tech sell-off and AI competition. Group 1: Alphabet (Google) - Alphabet's stock is experiencing a sell-off despite recent highs, influenced by broader market conditions and potential Fed interest rate cuts, which have increased from a 35% to an 80% chance of a rate cut [2][3]. - The company's primary revenue driver remains ad revenue and search results, which have shown strong performance, alongside new developments in AI with the release of Gemini 3 and partnerships involving TPUs [4][5]. - Despite being at all-time highs, Alphabet's investments and free cash flow position it as a strong pick, with potential pullback opportunities for investors [6]. Group 2: Nvidia - Nvidia's shares are under pressure, down about 5%, but year-to-date, they are still up close to 30%. The competition with Alphabet's TPUs is noted, but Nvidia's software capabilities create a significant competitive moat [14][19]. - The technical analysis indicates a sideways trading range for Nvidia, with potential support around 165 and resistance near 185 to 188, suggesting a cautious outlook [21][26]. - The recent AI bubble discussions have contributed to Nvidia's volatility, but the overall demand for AI hardware remains strong, indicating a robust pipeline for the company [17][19]. Group 3: Oracle - Oracle's stock has been punished recently, down more than 30% in the last month, but it still shows a year-to-date increase of 17%. The company is viewed as having a clear path to profitability despite high upfront investments and debt [27][29]. - The structure of Oracle's financing, based on long-term contracts that provide predictable revenue streams, is highlighted as a positive factor, mitigating concerns about asset depreciation [31][32]. - The technical outlook for Oracle shows critical levels around 180 to 189 for potential support, with a need for a breakout to regain upward momentum [35][39].

Core Viewpoint - The Federal Reserve is likely to lower its key interest rate in October due to the ongoing government shutdown and its implications on economic data and the labor market [1][2][3] Group 1: Federal Reserve's Interest Rate Decision - The budget impasse in Washington may solidify the expectation of a rate cut by the Federal Reserve [1][2] - Wall Street experts suggest that the Fed will lean towards easing monetary policy, especially if the government shutdown prolongs [2] - A majority of Federal Open Market Committee officials indicated a preference for two rate cuts instead of one through the end of 2025 [4] Group 2: Economic Concerns - Ongoing concerns regarding the labor market and potential damage from the government shutdown are expected to outweigh inflation worries [3] - Despite cautious language from Fed officials, the likelihood of successive rate cuts remains high due to insufficient labor market reassurance [3] - Most officials believe that temporary inflation impacts from tariffs are unlikely to disrupt the trend of gradual softening towards the Fed's 2% inflation target [4]

Core Points - The dollar index fell by -0.31% from a one-week high, influenced by expectations of easier Federal Reserve policy and a potential 50 basis point interest rate cut this year [1] - Support for the dollar was provided by hawkish comments from several Federal Reserve presidents, indicating limited room for further interest rate cuts [1][3][4] Group 1: Federal Reserve Outlook - The Federal Open Market Committee (FOMC) is expected to cut interest rates by another 50 basis points this year, with a 90% chance of a 25 basis point cut at the next meeting on October 28-29 [1][4] - St. Louis Fed President Alberto Musalem noted limited room for additional rate cuts due to elevated inflation, suggesting current rates are "between modestly restrictive and neutral" [3] - Atlanta Fed President Raphael Bostic expressed concerns about elevated inflation, stating he does not foresee inflation returning to 2% until 2028 [3] Group 2: Dollar Weakness and Market Reactions - Concerns over the independence of the Federal Reserve, particularly regarding President Trump's attempts to influence Fed governance, may lead foreign investors to sell dollar assets [2] - The euro gained strength, rising by +0.43%, supported by dollar weakness and positive developments such as Fitch Ratings upgrading Italy's sovereign credit rating [5] - Central bank divergence is evident, with the European Central Bank (ECB) seen as nearing the end of its rate-cut cycle, while the Fed is expected to implement further cuts [6]

Core Viewpoint - The dollar index is experiencing downward pressure due to expectations of easier Federal Reserve policy, with a potential interest rate cut of 50 basis points anticipated this year [1][2]. Group 1: Federal Reserve Outlook - The dollar index (DXY00) fell by -0.12% from a one-week high, influenced by the outlook for easier Fed policy [1]. - The FOMC is expected to cut interest rates by another 50 basis points this year, with a 92% chance of a -25 basis point cut at the next meeting on October 28-29 [4]. - St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic expressed limited room for further rate cuts due to elevated inflation concerns [3][4]. Group 2: Market Reactions - The euro is gaining support from the dollar's weakness, with EUR/USD rising by +0.19% [4]. - Fitch Ratings upgraded Italy's sovereign credit rating, which positively impacted the euro [4][5]. - The Eurozone's September consumer confidence index rose by +0.6 to -14.9, exceeding expectations [5]. Group 3: Currency Movements - The USD/JPY pair decreased by -0.03%, with the yen recovering from a two-week low due to a weaker dollar [6]. - Higher Japanese government bond yields, reaching a 17-year high of 1.670%, have strengthened the yen's interest rate differentials [6].

Market Overview - The S&P 500 Index is up +0.16%, the Dow Jones is up +0.04%, and the Nasdaq 100 is up +0.19% [1] - The Nasdaq 10 has reached a new all-time high, driven by expectations of additional Fed interest rate cuts [2] - Market volatility is heightened due to the quarterly event known as triple-witching, with $5 trillion in stock options, futures, and derivatives expiring [2] Interest Rates and Federal Reserve - Minneapolis Fed President Neel Kashkari supports a recent 25 basis point rate cut and anticipates two more cuts this year [3] - The market is pricing in a 92% chance of a 25 basis point rate cut at the next FOMC meeting on October 28-29 [4] - The 10-year T-note yield has risen to 4.143%, a two-week high, influenced by stock market strength and concerns about Fed independence [5][6] International Markets - European stock markets are mixed, with the Euro Stoxx 50 rising to a four-week high, while China's Shanghai Composite fell by -0.30% [4] - German PPI fell -0.5% month-over-month and -2.2% year-over-year, marking the largest year-on-year decline in 15 months [7] Company Performance - Major technology stocks, including Tesla and Apple, are showing strength, contributing positively to the overall market [11] - Klaviyo Inc and Lincoln National have both seen stock upgrades, with price targets set at $50 and $58 respectively [12] - Scholastic Corp reported a Q1 adjusted loss per share of -$2.52, wider than consensus estimates, leading to a decline of more than -12% in stock price [13] - Lennar's Q3 revenue of $8.81 billion fell short of the consensus of $9.05 billion, resulting in a stock decline of more than -4% [14]

Market Overview - The S&P 500 Index closed up +0.30%, reaching a new record high, while the Dow Jones Industrials Index closed down -0.48% and the Nasdaq 100 closed up +0.04% [1][2] - The broader market was supported by a decline in bond yields, with the 10-year T-note yield falling -6 basis points to a 5-month low of 4.03% [2][10] Company Performance - Oracle's stock surged +35% to a record high after providing an aggressive outlook for its cloud business, driven by strong demand for AI infrastructure [3][14] - Stocks related to AI computing infrastructure also rallied, with CoreWeave up +17%, Broadcom up +9%, and Nvidia up +3% [15] - Apple experienced a decline of more than -3% due to market disappointment over the launch of new products [4][21] - Salesforce fell more than -3% after Oracle's results indicated weak demand for traditional software [4][20] Economic Indicators - US MBA mortgage applications rose +9.2% in the week ended September 5, with the average 30-year fixed mortgage rate falling to an 11-month low of 6.49% [6] - The final-demand PPI for August eased to +2.6% year-on-year, lower than expectations, indicating a potential easing of inflationary pressures [6][8] Geopolitical and Global Market Impact - Geopolitical tensions in Europe, particularly related to Poland's actions against drones, are negatively impacting stock markets [5] - China's August CPI fell -0.4% year-on-year, marking the steepest decline in six months, which raises concerns about global growth prospects [5] Future Market Expectations - Markets are pricing in a 100% chance of a -25 basis point rate cut at the upcoming FOMC meeting, with expectations of further cuts by year-end [8]

Market Overview - The S&P 500 Index reached a new record high, while the Nasdaq 100 hit a 4-week high, indicating a positive market sentiment [2] - Stocks are supported by a decline in bond yields following a surprising easing in US producer prices for August, which has strengthened expectations for Federal Reserve interest rate cuts [2][9] Company Highlights - Oracle's stock surged by +42% to a record high after the company provided an aggressive outlook for its cloud business, driven by strong demand for AI infrastructure [3][13] - CoreWeave, Broadcom, Arista Networks, Nvidia, Super Micro Computer, and Advanced Micro Devices also saw significant gains, reflecting a rally in AI computing infrastructure stocks [14] - Travere Therapeutics rose by +27% after receiving positive news regarding its supplemental drug application for a rare kidney disorder [16] - GameStop reported Q2 hardware and accessories net sales of $592.1 million, exceeding expectations, leading to a +5% increase in its stock [16] - Johnson Controls International raised its quarterly cash dividend to 40 cents per share, above market expectations, resulting in a +3% increase in its stock [17] Economic Indicators - US MBA mortgage applications increased by +9.2% in the week ending September 5, with the average 30-year fixed mortgage rate falling to an 11-month low of 6.49% [5] - The final-demand PPI for August eased to +2.6% year-on-year, lower than the previous month's +3.1% and below market expectations [5] - China's August CPI fell by -0.4% year-on-year, marking the steepest decline in six months, while the PPI fell by -2.9% year-on-year, indicating ongoing deflationary pressures [4] Stock Movements - Apple shares fell by more than -2% due to market disappointment over the latest product launches [4][19] - Synopsys experienced a significant drop of more than -34% after forecasting lower-than-expected full-year adjusted EPS [17] - Humana's stock declined by more than -2% following concerns about changes in Medicare quality ratings affecting revenue [17]