Weekly Buzz: Finally Some Rate Cut News From the Fed
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Weekly Buzz
What a Friday it is! Federal Reserve President Jerome Powell said everything short of 'we are cutting rates in September' at the Jackson Hole, WY Economic Symposium this morning. The market reacted positively, with indexes climbing right up to the shoulder of record highs.
Every sector on the S&P 500 was in the green Friday after the Fed news.
The market climbed within all-time highs shortly after Powell hit the podium, and news reports said the Federal Reserve was ready to cut rates. Powell did not specify the timeline of these rate cuts, but he said he was confident the economy was on the way to 2% inflation.
"The time has come to adjust, and the direction is clear," Powell said.
Just past the Firday close, the $S&P 500 Index (.SPX.US)$ traded +1.15% for the week, the $Dow Jones Industrial Average (.DJI.US)$ climbed 1.27%, and the $Nasdaq Composite Index (.IXIC.US)$ climbed 1.40%.
Though Fed Powell's speech did not highlight the timeline for rate cuts, Wednesday FOMC meeting minutes from July paint a short time frame. Members reportedly were ready to cut rates in September if everything stayed the same; some even wanted to cut rates then.
Thursday, U.S. Initial Jobless claims showed that about 232k Americans were newly unemployed, around the forecast and the year average of 220k. Existing home sales came in at 3.95M for July, right around last month's 3.9M. S&P PMI came in slightly higher at 55.2 on Thursday.
Investors are digesting comments made during the Democratic National Committee. Wednesday night, Tim Walz accepted his VP nomination. So far, the Harris campaign has made public their plans to combat price gouging, subsidize housing, and raise the corporate tax rate 7% to 28%. President Barack Obama and Joe Biden made an appearance this week.
Next week, investors can look forward to more macroeconomic data that might inform how the FOMC will decide on rate cuts to come. CB Consumer Confidence numbers come out Tuesday, Crude Oil Inventories and a speech from FOMC member Bostic will arrive Wednesday; Continuing and Initial JObless claims will drop Thursday alongside updated GDP numbers for the second quarter.
Friday, we will see the release of the Person Consumption Expenditure index for July, the Fed's favorite inflation measure. Last time, the PCE came in at 2.6% year over year, the lowest since 2021. Michigan consumer expectations and confidence will also drop Friday.
Investors are awaiting a myriad of earnings reports next week, but none are more closely watched than Nvidias, expected after the bell on Wednesday, August 28th.
Interested in Options? To see these stocks and more on the options page, click here. Want to learn more about options? Check out moomoo education with this link. Click here to join our exclusive options chat with personal callouts from our resident expert, Invest with Sarge.
Anyway, let's dive into the buzzing stocks this week:
According to moomoo Sr. News manager Luzi Santos, $NVIDIA (NVDA.US)$ is seeing holders of zero-days-to-expiration (0DTE) call options pull what's left of their money about an hour before trading closed Friday. Nvidia and Tesla $Tesla (TSLA.US)$, continued to hold the crown for the most popular stock options according to moomoo. Shares of the two companies rallied Friday, tracking gains across the broader market, after Federal Reserve Chairman Jerome Powell said "the time has come" to start cutting interest rates.
"Here comes the punchbowl," Bloomberg quoted David Russell, global head of market strategy at TradeStation, as saying. The punchbowl metaphor was made famous in October 1955 by then Fed Chair William McChesney Martin, Jr., referring to Fed moves that could juice the market rally.
"This keeps a tailwind at the market’s back into year-end, making it harder to expect a retest of this month’s lows," Russell said.
@70176618 no way to win today for da bulls......every time it gets even close they open up the pools.
Tesla's head of finance operations left the company Thursday, causing a 4% stock price jump and further shuffling the electric vehicle maker's top ranks. $Tesla (TSLA.US)$ Vice President Sreela Venkataratnam, an 11-year veteran of the company, said in a post on LinkedIn Wednesday that she would take time off work after stepping down from her role.
Venkataratnam was one of the two most senior female executives at Tesla. Her departure leaves Laurie Shelby, vice president of environmental, health, safety, and security, as the lone woman in Chief Executive Elon Musk's executive team. Friday, Powell's talk of rate cuts breathed enthusiasm into the market, and Tesla's stock rebounded.
@ZnWC: Tesla Autopilot Director shares HW3 has similar performance
Maxeon climbed Monday after the solar panel firm told a local newspaper it would soon begin construction on a Mesa Del Sol project in New Mexico, slated for Q4. The planned $1.9B facility is envisioned with the capacity to fabricate up to 7M solar panels annually, enough for 4.5 GW of power.
@Biff: Dipping Get some for next week
Powell's rate cut signaled some crypto optimism Friday, though the crypto has remained within the 55-70k zone for most of the year.
@72119894: we will see new all time high soon
Faraday Future shares flew higher Thursday after the stock began a 1-for-40 reverse stock split to raise the firm's stock price to remain on exchanges this week. The firm also announced a "bridge Strategy" for China-US, with plans to build a 'performance EV' for 'half the price.'
@2024leggo: if it bounces back i will feel eternally grateful.
The small-cap robotics firm Rchtehch Robotics, headquartered in Ls Vegas, NV, took to Twitter to post teasers that something big was coming soon. The stock climbed upwards of 83% for the week on Tuesday before announcing the installation of a humanoid drink robot in a Walmart in Rockford, Illinois.
@Betterthangold : this time last friday is when the rockets really started.
The small-cap holographic tech firm MicroCloud Hologram felt volatility this week and a stock boon of nearly 157% upside. The firm sold off 28 million in convertible notes this week.
@YummyDummy: This better hit $50 by EOD of I'm selling Chuddy as chopped liver.
AMD announced Monday it is making another artificial intelligence acquisition, this time with the purchase of AI infrastructure company ZT Systems in a deal valued at $4.9 billion. AMD says the deal will bring about "the next major step in AMD's AI strategy to deliver leadership AI training and inferencing solutions based on innovating across silicon, software, and systems," according to a release. The company will be tapping into ZT Systems' expertise in designing and optimizing cloud-computing offerings.
@modest Coyote_8262: amd really sucks, can't never catch up with NVDA
Apple continues to spend on a long-term project to build an in-house cell modem, Bloomberg's Mark Gurman said on Sunday. Currently, the cellular component is supplied by $Qualcomm (QCOM.US)$. The firm believes that replacing Qualcomm's modem chips is tough as they are already state-of-the-art and have been "battle-tested by phone carriers around the world, making them highly reliable." Johny Srouji, who runs the hardware team at Apple, said in a CNBC interview that it's unlikely that any upgrades Apple makes to the part will result in a better user experience and that developing a modem was "extremely difficult to do."
@cola1010 Book worth reading #8: One Up On Wall Street by Peter Lynch
- Explains how individual investors can achieve financial success by investing in what they know and understanding the fundamentals of the companies they invest in.
- Explains how individual investors can achieve financial success by investing in what they know and understanding the fundamentals of the companies they invest in.
DJT is a stock that faces high volatility that is directly related to the upcoming presidential election. This week, while the DNC raged on and sucked up a lot of the election attention, the stock jumped 8% after news that third-party candidate Robert F Kennedy would drop out of the race. There was a rumor that Kennedy could extend his support to the Trump ticket. The stock later fell when the Trump team announced the launch of a Trump crypto project through a Truth Social post.
@All About AI: Who is shorting this stock today
Thanks for reading!
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Weekly Topic
After the FOMC and Powell made it clear rate cuts are coming, how are you going to prepare?
Comment below and share your ideas! We will select up to 15 TOP COMMENTS for a reward next week. Winners will get 200 points by next week, with which you can exchange gifts at Reward Club.
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HuatLady : With the FOMC and Powell signaling rate cuts, I'm focusing on rebalancing my portfolio to take advantage of potential growth in equities and bonds. Additionally, I'm reviewing my debt strategy to benefit from lower interest rates I'm also keeping an eye on sectors that typically benefit from lower rates, such as real estate and consumer discretionary![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
. It's a good time to reassess risk tolerance and ensure my investments align with my long-term goals.
102362254 : I'll focus on understanding how these anticipated rate cuts might impact various sectors of the economy and investment opportunities. It's not just about the immediate market response. Sectors like housing and consumer goods, which are sensitive to borrowing costs, might see benefits at first. But we also need to watch for longer-term impacts on inflation expectations and corporate earnings.
HuatEver : Thanks for the rewards.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
After the FOMO and Powell made it clear that rate cuts are imminent, it is like retreating to a quiet sanctuary, whereby there is nothing much to prepare, except to continue investing in high-quality stocks and to reap their bountiful dividends without being unduly worried about all the potential Fed rate changes.
Investing is enjoyable and relaxing for me. It doesn’t have to be stressful, especially when I am a long-termed investor. As such, HuatEver will continue to “HUAT”, and enjoy life whatEver it may bring, with a well diversified portfolio, hehe
EZ_money :
puddy1 : with rate cuts coming, looking at REITS and rate sensitive sectors like real estate to rebalance portfolio.
104247826 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
mr_cashcow : Thanks for the reward points! My preparation includes but not limited to high-quality bonds, treasury securities or bond funds and also stocks that might see potential gains in rate-sensitive sectors such as utilities, REITs, consumer staples & banks![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
ZnWC : Thanks for the reward points![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
My portfolio is prepared for the Fed rate cut and any volatility risk. I am getting positive return which shows that my portfolio is going in the right direction. I take a long position mainly on big tech stocks and may buy covered calls to protect my upper limit. However I am wary of other possible risk like geopolitical tension and disease outbreak which may delay FOMC decision.
Read here:
2024 H1 Recap: Four "D" Trading Strategy and H2 Outlook
104476495 : hi
Prof Ho : While certain sectors tend to benefit from lower interest rates (say, utility companies as they tend to borrow a lot of money to fund their capital expenditure), I believe that the market more or less has prized in the prospect of rate cuts by the FED (in other words, the stock price has increased in expectation of the potential benefits brought by rate cuts). In addition, the market is likely to be highly volatile in the coming months or so due to the uncertainty brought by the US Presidential Election and the heightening geopolitical tensions/worries about the health of the US economy (e.g. whether a recession would occur).
So, I would adopt a more cautious approach in which I would ensure that I have sufficient free cash flow so that I can take advantage of the (potential) significant market correction (purchasing good companies at cheap prices). After all, be greedy when others are fearful!
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