Core Viewpoint - The article reflects on the rapid passage of time as the year approaches its end, emphasizing the urgency and anticipation associated with the holiday season [1] Group 1 - The phrase "Tempus fugit" highlights the fleeting nature of time, particularly as December progresses [1] - The mention of "closing time" in a local establishment suggests a communal experience and the social aspects of year-end celebrations [1] - The reference to being "more than a quarter of the way through December" indicates a sense of urgency as the year draws to a close [1]

Market Trends - Analysts suggest a "Santa rally" is now unlikely due to Bitcoin's decline following the Federal Reserve's "hawkish cut" [1] Cryptocurrency - Bitcoin's slip is a contributing factor to the unlikelihood of a "Santa rally" [1]

Core Viewpoint - The U.S. Federal Reserve's recent interest rate cut was characterized as a "hawkish cut," with mixed reactions from investors, but the announcement of Treasury bill purchases provided a positive surprise for the markets [1][2][3]. Group 1: Federal Reserve Actions - The Federal Reserve lowered interest rates, but two regional bank presidents advocated for maintaining the current rates, indicating a cautious approach [2]. - The Fed's "dot plot" projections suggest only one rate cut in 2026 and another in 2027, reflecting a conservative outlook on future monetary policy [2]. - The Fed announced it would begin purchasing $40 billion in Treasury bills, which is expected to increase the money supply and support financial markets [3]. Group 2: Economic Outlook - Fed Chair Jerome Powell expressed confidence in the resilience of the U.S. economy, raising the forecast for economic growth in 2026 to 2.3% from a previous estimate of 1.8% [3]. - Powell emphasized the strength of the economy, suggesting that the last interest rate decision of 2025 could lead to a positive market trend, potentially resulting in a "Santa Claus rally" for the year-end [4]. Group 3: Market Reactions - Following the Fed's meeting, U.S. markets experienced a rise, attributed to the unexpected announcement of Treasury bill purchases and Powell's dismissal of future rate hike speculation [3]. - Analysts predict that the S&P 500 could exceed the 7,000 milestone in the coming weeks, indicating a strong finish to the year for investors [4].

Fed Policy Stance - The market interprets the Fed's recent actions as a dovish meeting rather than a hawkish cut, despite the rate cut [1][2][7][10] - The Fed is perceived to be more focused on employment risks, specifically the potential rise in unemployment, than on inflationary pressures [6] - The Fed seems to downplay inflationary risks, suggesting good progress on inflation, if not for tariffs [3][4][5] Quantitative Easing (QE) and Tightening (QT) - The Fed has unexpectedly ramped up QE by $40 billion, after a period of QT, raising hopes for further QE if needed [7] Interest Rate Dynamics - Despite the Fed dropping rates by 175 basis points since September, the 2-year Treasury rate remains unchanged [6] - The Fed funds rate is now in line with the 2-year Treasury yield [5][6] - Long-term interest rates, such as the 30-year Treasury, have risen by approximately 75 basis points since the Fed started cutting rates [8][9] - The 2s30s Treasury curve has steepened to around 123-124 basis points, approaching the year's high of 130 basis points [10] Economic Assessment - The Fed estimates that monthly jobs gains are overstated by approximately 60,000, suggesting a potentially weaker labor market than reported [2] - The market believes that cutting interest rates is not helpful for long-term interest rates [9] - Cutting rates by 175 basis points has not helped the housing market [8]

Market Overview - The market is currently in a wait-and-see mode ahead of the Federal Reserve's decision, with NASDAQ showing a decline while other indices are performing positively [1] - The 10-year yield has reached 4.20%, the highest since September 4, raising questions about its impact on equities [1] Interest Rates and Equities - Technical resistance for the 10-year yield is noted between 425 and 430, with a more significant resistance level for equities identified at 450 [2] - Historical context shows that yields have risen after each cut since September, with current yields only nine basis points above the levels when cuts began [3] - The rise in yields following the September cut was 100 basis points by the end of the year, suggesting that current concerns about yield increases may be overstated [4] Federal Reserve Outlook - The language used by the Fed regarding future rate cuts, particularly if it is hawkish, is expected to have a more substantial impact than today's rate decision [5] - There is speculation about the potential for elevated bond market volatility returning in 2026, which could pose challenges for the market [6][7] - The market appears to have already priced in a hawkish stance from the Fed, leading to bullish sentiment among investors [8] Earnings Reports and Market Reactions - Upcoming earnings announcements from Oracle and Broadcom are anticipated to be significant for market direction, potentially overshadowing the Fed's announcements [8][12] - The market is currently at a high, with the S&P and NASDAQ showing minimal percentage changes, indicating uncertainty about future guidance from major companies [12] Future Economic Indicators - The probability of a follow-on rate cut in January has decreased to 23%, with more confidence in a cut expected by June [19][20] - The upcoming economic data next week could dramatically alter the Fed's outlook and policy decisions [22]

Joining us here at Post 9 this morning is PNC Asset Management Chief Investment Strategist Young Yuma. Welcome back. It's good to see you.>> Thanks, Col. Great to be here. >> Um, we've been talking about how built in the consensus view is about this afternoon.Any reason to think there might be surprises. >> Well, the consensus view on a hawkish cut is pretty well established, but it's interesting sometimes when you get actually the result of the consensus. So, if the Fed delivers that hawkish cut, sometimes ...

Group 1 - The consensus is leaning towards a hawkish cut with minimal commitment to further cuts, which aligns with market expectations [1][2] - The number of dissenting votes and their sources will be crucial in shaping future guidance from the Federal Reserve [2][3] - The dot plot's representation of potential future cuts will influence the language used in the Fed's statements, emphasizing data dependence [3][4] Group 2 - A significant number of dissenting votes could undermine Chair Powell's leadership and policy choices [4][6] - There is skepticism about the actual number of dissenters, with expectations that appeals for unity may reduce dissenting opinions [6][7] - Historical context suggests that calls for unity have been made in the past during challenging times, indicating a potential strategy for the current Fed leadership [6][7]

Group 1 - Major U.S. banks, including JPMorgan and Bank of America, predict a 'hawkish' cut of 25 basis points (bps) at today's FOMC meeting, with expectations of fewer cuts in the future [2][3][6] - Fed Chair Jerome Powell is anticipated to signal a higher threshold for future rate cuts, indicating a potential slowdown in monetary easing [1][4][8] - Crypto traders are pricing in a 97% chance of a 25 bps rate cut today, following similar cuts in September and October [5][6] Group 2 - Goldman Sachs and Citi also expect a hawkish cut, with Goldman citing a softening labor market as a reason for the cut [4][6] - Economist Alex Krüger suggests a possible surprise announcement regarding T-Bill Reserve Management Purchases to enhance banking system liquidity, which would resemble quantitative easing [7] - Krüger notes that a priced-in hawkish cut could lead to increased market volatility [8]

分组1 - The market is anticipating an 88% chance of a rate cut, with the distinction between a hawkish or dovish cut being crucial for market sentiment [2] - A dovish cut would indicate potential for further easing, while a hawkish cut would suggest a slowdown in rate reductions [2] - Current futures indicate that the next rate cut is pushed to April, with only two cuts expected in 2026, a significant decrease from four cuts previously anticipated [3] 分组2 - Oracle has a substantial backlog of $455 billion, which could either bolster confidence or raise skepticism about the monetization of these commitments [4] - The market's perception of Oracle's backlog will be critical; a significant increase may lead to doubts about its validity, while a lower backlog could validate existing skepticism [4] - Oracle's debt remains inexpensive, but demand for its bonds has been weak, indicating a disconnect with the AI-cloud growth narrative [5] 分组3 - Adobe is currently trading at a historically low valuation compared to its long-term multiples, but this alone does not guarantee a buy signal [6] - The stock chart for Adobe is showing signs of improvement, with shares approaching the daily 100MA, which could indicate a shift towards a bullish trend [6] - The upcoming earnings report will be pivotal in determining whether Adobe can maintain its status as a software leader in the AI landscape or if it has lost momentum [8]

Group 1 - U.S. Treasury yields increased as investors awaited the Federal Reserve's interest rate decision, with a 90% probability of a quarter percentage point cut expected [2][4] - The benchmark 10-year Treasury yield rose to 4.204%, while the 30-year Treasury yield reached 4.819%, and the 2-year Treasury yield nudged up to 3.625% [1][2] - Sentiment among FOMC members is divided, with some advocating for cuts to mitigate labor market weakness, while others are concerned about potential inflationary impacts [3][4] Group 2 - The anticipated outcome of the Federal Reserve's meeting is a "hawkish cut," indicating a reduction in rates but suggesting that further cuts may not be imminent [4] - Investors are particularly focused on Fed Chair Jerome Powell's comments following the meeting for insights into future monetary policy [4]