Moo Spotlights | Rates down, profits up?
Heyyyy mooers! ![]()
How's your portfolio faring after the US Fed's rate cut? Has it given you a boost in paying off your mortgage, loan, or perhaps even afforded you a fine dinning? 🍽️![]()
Meanwhile, the Reserve Bank of Australia (RBA) has also announced its latest interest rate decision, maintaining the previous level at 4.35%.
The Federal Open Market Committee lowered the target Federal Funds rate 50 basis points, citing the progress in inflation and slowing job gains. Policymakers took the rate to a range of 4.75 to 5%, noting that the committee has gained greater confidence that inflation is moving sustainably toward 2%.At the same time, the Fed's so-called dot plot showed policymakers forecast the median key interest rate ending 2024 at 4.4%, before declining to 3.4% by the close of next year. At 2:30, Fed Chairman Jerome Powell will address reporters at a press conference.
Markets nudged up to brand new record all-time highs overnight as investors locked into accumulation mode, gaining fresh confidence after China's central bank joined the US Federal Reserve in cutting rates. With two powerhouse economies now cutting rates in unison, European and US shares rallied with mining stocks leading the gains, while gold hit fresh shiny records.
Currency markets reveal traders are optimistic the Fed will keep cutting interest rates, but aren't sure of the size of the November cut.
While the RBA pointed to more pain ahead for consumers, and pushed out its expectation for inflation to get back to its target until 2026, the long-term trend for the share market is still up. Markets don't go up in a straight line after all.
💡 Mooer's insights
We found that some of the mooers put an eye on US stocks, especially on $NVIDIA (NVDA.US)$and $Bitcoin (BTC.CC)$ :
@Ming1314: "$NVIDIA(NVDA.US)$ 50 point cut is beneficial for the economy as it aligns with the labour market as well as unemployment. If it was a 25 point then tech stocks would have plummeted as investors would be worried about cutting too slow. this is essential and good for the economy so business can take out more loans and increased productivity. $S&P 500 Index (.SPX.US)$ will likely breakout above 5750 tonight. this bullish trend may stop half way across October due to recession fears and it definitely exists, however economic datas lately had proven it is not yet at the tipping point and it's not too bad. Following precedent cases, the US stock market has not been done in years where a presidential election is happening, you can refer to what happened in 2007, it went up the first month after the cut. and the data provided back then was way worse, unemployment was 4.7% compared to 4.2% now." Join the discussion>>
@151278629: "$NVIDIA (NVDA.US)$ have you found since the US rate cuts, you asset devalued anyway because the stock increase can’t offset the exchange rate decrease. "
@Leo223: "$E-mini NASDAQ 100 Futures(DEC4)(NQmain.US)$ What a mess! Bulls? Bears? Both? What's even going on? Is this real life?"
@Salvador Ginori: "$SPDR S&P 500 ETF(SPY.US)$ unbelievable 568 then it drops to 561 i thought rate cut 50bs was suposee to be this big theme "
"$Bitcoin(BTC.CC)$ Beneficiaries of lower interests rates : Bitcoin, Bitcoin ETF, Gold, Bonds, Fixed Income Funds & export-centric companies $2x Bitcoin Strategy ETF(BITX.US)$ $Capital Group Fixed Income ETF(CGCP.US)$ "
"$Omega Healthcare Investors Inc(OHI.US)$ The attractiveness of high dividends stocks is much much lower now, considered the reduction of interest rates & associated bump to gold, export trade companies, bond funds, tech stocks, even crytocurrencies like bitcoins. Niche REITs maybe some exceptions but still their prices adjustments are inevitable in the short run. $NVIDIA(NVDA.US)$ $Bitcoin(BTC.CC)$ "
Also, there are mooers stuck with ASX stocks, focusing on the rate-cut impact on Australian stocks:
@JC7577: "One of the bull theories I've heard is the price is being driven by foreign investors. Well now with monetary easing in the USA, a weaker USD and more liquidity in the US, it makes American top tier stocks a more attractive investment. Do the foreigners take the gains, buy the cheaper USD and move into similar valued companies with better earnings potential? That's a positive scenario, as the other theory for the 50 basis rate cut is the Fed is worried about a hard landing, which would be worse for the $CommBank (CBA.AU)$ SP. I also believe the longer the SP treads water between $140-145, you would be more inclined to see a sell off. If CBA shareholders believe the rally is over they could all rush for the exits to lock in the gains - no new buyer and recent buyer wants the 3.2% dividend yield - they want to ride the wave to $150. We shall see."
@CyberMongrel: "Liked this graphic - the US joins the easing cycle - notably Australia hasn't cut yet. 50bps puts the RBA under a little bit more pressure to cut than it was, but it is still unlikely to cut this year. $Westpac Banking Corp(WBC.AU)$ "
Let's move forward. Following the Federal rate cut, we're now witnessing new trends in the semiconductor industry and the potential opportunities for ASX mining stocks. So:
Pick one of the topics and share your thoughts in comments. Moomoo AU will choose up to 20 high-quality comments, distributing 200 points to each of the commentator as the incentives!
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102362254 : Absolutely! With Micron's earnings report approaching and the buzz around Intel and Qualcomm’s potential takeover, this is a pivotal moment for event-driven trading. These developments could trigger significant market volatility, creating great opportunities for traders to capitalize on momentum shifts in the semiconductor sector.
WolfRun : I’m holding $Qualcomm (QCOM.US)$ although it’s the worst performing holding in my portfolio now. I do hope there will be more positive tech events that will drive the stocks up. Of course the fundamental earnings will have to justify that.
CasualInvestor :
Informed Contrarian : Rate cut was long due, and market has fully factored it in albeit a larger rate cut than anticipated. The market will need confirmation from another key indicator to have the confidence to break up. else we looking at retesting support
Ming1314 : Thank you ! I will try to provide insightful advice to investors
mr_cashcow : Well as the saying goes buy the rumor sell the news so there is definitely opportunities in the many positive news about intel plus it is a crucial company that the US government won't just stand by and do nothing. They even give it funding.
As for China, lately alibaba have pushed out quite a few ai features and it seems they are not giving up on this ai race with USA! Even more opportunities there!