Weekly Buzz: Rate cuts bring record stock gains
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Weekly Buzz
This week was about the FOMC rate 50 basis point target Federal Funds rate cut decision, released Wdnesday. After the news, the S&P 500 and Dow hit all-time records on Wednesday and Thursday.
For the week, indexes climbed. The $S&P 500 Index (.SPX.US)$ climbed 1.36%, the $Dow Jones Industrial Average (.DJI.US)$ climbed 1.62%, and the $Nasdaq Composite Index (.IXIC.US)$ fell 1.49%.
The Federal Open Market Committee lowered the target Federal Funds rate by 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%.
Futures numbers tracked by CME FedWatch tool expected a 50 bp cut. Based on the Fed's dot plot of rate expectations, they put a midpoint rate target at about 4.4% by the end of 2024, meaning a range of about 4.20%-4.60%, or two 25 bps cuts at each of the next two meetings.
Oil futures rose this week after news reports said pagers, walkie-talkies, and other devices carried by thousands of Hezbollah operatives in Lebanon exploded in an apparent coordinated sabotage attack. Combined with increased shelling from Israeli artillery, the attacks fanned fears of a broader Middle East conflict that could threaten crude flows from the region. $Crude Oil Futures(JAN5) (CLmain.US)$ climbed 2.8% to above $71/barrel for the first time since the prices dropped at the beginning of the month.
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:
Nvidia shares jumped 5% Thursday, one of the highest climbers on the $S&P 500 Index (.SPX.US)$ and the $Nasdaq Composite Index (.IXIC.US)$ less than a day after the U.S. Federal Reserve cut interest rates.
According to momoo news' senior reporter @Luzi Ann Santos, lower rates are seen as positive for stocks since they pave for interest expense for companies, while improving their access to cheaper debt needed for expansion. The rate cuts could also unleash investments parked in money market funds that could find their way into equities.
Tesla shares, alongside $Alphabet-A (GOOGL.US)$, $Alphabet-C (GOOG.US)$, and even $NVIDIA (NVDA.US)$ climbed after the rate cute news Wednesday, like a year-long tech bull run was back. The magnificent seven stocks had pulled back in the third quarter after a blistering year of stock price gains. Since mid-July, Tesla has fallen about 7% and fell 25% in July alone. Even near-perfect estimate matching or beating earnings were insufficient to keep Mag 7 stocks on their meteoric climbs. Even with the July and August pullback, Tesla is up 15% annually.
$Bitcoin (BTC.CC)$'s price climbed toward $62,000 following the Federal Reserve's announcement of a 50 basis points interest rate cut, aimed at preventing a labor market slowdown. This rate cut, larger than some expected, boosted cryptocurrency prices, with Bitcoin and $Ethereum (ETH.CC)$ rising due to their perception as risk-on assets. Marc P. Bernegger, co-founder of AltAlpha Digital, believes that the anticipated reduction in the federal funds rate could drive higher cryptocurrency prices by increasing liquidity and attracting investors to riskier assets.
@EZ_money: nobody wants this . it's never going to grow like you think.
Shares of $Intuitive Machines (LUNR.US)$ are skyrocketing as much as 58% Wednesday, lifted by the award of a NASA contract that could be worth up to $4.82 billion. Late Tuesday, Intuitive Machines announced that NASA had awarded the company the Near Space Network contract for communication and navigation services for missions in the near-space region, which extends from Earth's surface to beyond the Moon.
@steven smith38: get ready for Warrrrrrrrr
$Intel (INTC.US)$ shares were surging 7% at the start of the week following reports that the company is set to qualify for up to $3 billion in federal funding to produce semiconductors for U.S. military applications. The potential grant, part of the CHIPS and Science Act's Secure Enclave program, aims to secure a domestic supply of advanced chips critical for defense and intelligence. $Intel (INTC.US)$ climbed more than 3% Friday after a Wall Street Journal newswire line that $Qualcomm (QCOM.US)$ had reached out for a potential takeover. WSJ attributed the news to annonymous sources. Qualcomm shares fell after the news, while investors await further WSJ updates.
@ sometimes you have to just give it a little love tap to wake it up
Trump Media $Trump Media & Technology (DJT.US)$ fell 3.84% Monday after a gunman with a scoped rifle came within 400 yards of Trump again on Sunday, and luckily, no one was hurt. Early investors in the SPAC merger deal that brought the company public will be able to trade their locked-up stocks after September 19th. Friday, the stock fell 8% on the first day insiders could sell shares.
@DipHunter: Let’s see what mooers think here Would you still vote for Trump if this stock drops under $5?
$Apple (AAPL.US)$ stock dropped 3% Monday after analysts said that demand for the new iPhone might be soft, particularly in China. Apple's newest generation of products will eventually have access to new AI tools, but not at launch, the firm said during its fall tech showcase. The firm unveiled its highly anticipated iPhone 16, Apple Watch Series 10, and AirPods 4 on Friday, drawing crowds to stores worldwide. Apple shares were trading just over 1% higher at midday. Apple's AI tools are likely to come to non English customers months after English speakers get the updates, analysts warned.
@FiveHundredCents: Biggest Rate Cut Stock Winners: Apple, Nvidia Rally $250 Billion
Chinese electric vehicle stocks $XPeng (XPEV.US)$ , $Li Auto (LI.US)$ , $ZEEKR (ZK.US)$ , and $NIO Inc (NIO.US)$ are trading higher Tuesday after a Monday report indicated that the People's Bank of China (PBOC) looks to slash the bank reserve requirement ratio (RRR) by 50 bps, followed by another half-point cut in the first half of 2025. Li climbed 10%.
@TWP PaPa: no worries, short are trying hard to pull Nio down. Now most important is to get as many deliveries as possible.
According to Benzinga, GME shares climbed Friday after CEO Ryan Cohen agreed to pay $985,320 to settle Federal Trade Commission charges. He failed to report a 2018 personal purchase of stock in Wells Fargo.
@70614416: Its up $2. whoopee. Lets see +$20 or more and ill celebrate
According to @Invest with Sarge:"" $Palantir (PLTR.US)$ ...will be headed into the S&P 500 after the close of business tonight. That should, in theory, bring in a lot of demand for the shares as all of those funds mandated to track the S&P 500 must get long varying allotments of this name. The opportunity also brings out sellers as they know there will be buyers. PLTR closed at $36.83 on Thursday afternoon. The stock traded as low as $35.81 overnight and I have seen it last trade at $36.24.
What gives? Morgan Stanley (MS) was said last night to be shopping a 10M share block for an unidentified shareholder. The shares were being offered between $35.90 and Thursday's closing price and will trade on Friday. Near the close? I don't know. The sale has been described as an unregistered secondary resale. ""
Thanks for reading!
* All comments, links, and content posted or shared by users of the community are the opinion of the respective authors only and do not reflect the opinions, views, or positions of Moomoo Financial Inc., Moomoo Technologies, any affiliates, or any employees of MFI, MTI or its affiliates. Please consult a qualified financial professional for your financial planning and tax situations.
Awards
Congrats to the following mooers whose comments were selected as the top comments last week!
Weekly Topic
Do you think these rate cuts are the start of a new stock bull run?
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 : Thanks for the rewards![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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Overall, the recent the Fed's rate cut seems to have a positive impact, with the S&P and Dow hitting record highs. However, as a long-term investor, I don't think this move necessarily signals the start of a new bull run for stocks. While it may give the market a short-term boost, it doesn't make a significant difference to my portfolio because I rely more on dividend payouts than short-term capital appreciations or market timing. I will continue to invest regularly in solid stocks and ETFs to build a divisified portfolio and capitalize on the power of compounding returns over time.
EZ_money : say hello to inflation again soon. inflationary recession get ready
EZ_money :
Dadacai : Generally a rate cut is good for the stock market because businesses can lower their borrowing costs and use the loans to expand. However we need to be mindful there can be other factors at play eg Japan carry trade, the presidential elections, war and other exigencies so we should plan for ways to hedge the risk and have an exit strategy when investing in any stock.
hw520 : thanks for the rewards
EZ_money Dadacai : especially when NATO keeps poking the damn bear
102362254 : The recent rate cuts have clearly boosted market confidence, driving stocks to new highs. While this is a positive sign, it’s important to remain cautious and keep an eye on how watch how the broader economic factors, such as inflation and global trends, unfold before becoming overly optimistic.
EZ_money : oh thank you
HuatEver : While the Fed’s rate cut certainly add fuel to the market’s momentum, I’d to be cautious in labelling this the start of a new bull run. Monetary easing can provide short-term optimism, but true, sustained growth depends on broader economic fundamentals like corporate earnings and consumers demands. Rate cuts are just one part of the macroscopic picture. While they can create a good environment for stocks to rise, they don’t guarantee a long-term market rally, especially with many other factors affecting the economy. My investing strategy remains unchanged: I focus on buying high-quality stocks that can withstand volatility and have a history of weathering the market cycles.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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ZnWC : Thanks for the reward![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Definitely. But the road to a full bull run is not smooth.
1) We should expect volatility due to geopolitical tension e.g. China-US tension and further escalation of Russia-Ukraine conflict and US recession deteriorating.
2) We should also expect not all stock reacts to the same degree to the rate cut. For example tech stocks which have value and growth will be more bullish.
3) REIT is another sector we should expect to be bullish but it depends on a stable and strong USD and how fast the bank starts to reduce the loan rate.
Bottom line
I have turned from cautiously optimistic to bullish about the stock market outlook. My 4D trade strategy is prepared for this rally and currently trading options (puts/calls) to earn passive income. This is the moment we have been waiting for those who have invested (or held) in value stocks (M7) when they were cheap.
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