TSLA
Tesla
-- 421.060 PLTR
Palantir
-- 80.550 NVDA
NVIDIA
-- 134.700 OXY
Occidental Petroleum
-- 47.130 AMD
Advanced Micro Devices
-- 119.210 
Weekly Syrup: 50 basis point rate cut=more than 50% chance to earn?
Hey mooers! ![]()
In the investment world, Federal Reserve decisions guide capital flow like a lighthouse. At the September FOMC meeting, the Fed announced a notable 50 basis point rate cut, concluding the rate-hiking cycle that started in March 2022.
This decision met the expectations set by CME interest rate futures. Despite the cut, Chair Powell adopted a cautious tone about future reductions, clarifying that this adjustment was tailored to the current job market and should not set expectations for future cuts. This approach aims to temper market optimism to avoid reigniting inflation. Read more>>
Then where are the potential opportunities? What should be my strategy? ![]()
A 50 basis point rate cut will likely result in:
– A drop in Treasury yields: A significant rate cut could further reduce yields in the short term as the market responds positively to the Fed's preemptive actions.
– An ongoing increase in Treasury prices: Even with a substantial cut, which the market anticipates, Treasury prices are expected to keep rising, albeit modestly.
Should the Federal Reserve opt for a gradual rate cut, we might see a slight uptick in Treasury yields and a minor decline in bond prices. However, a more substantial cut would lower yields and sustain the rise in Treasury prices, providing a strategic opportunity for market positioning. ![]()
In the current market, investors can choose to directly invest in bond ETFs, such as $iShares 20+ Year Treasury Bond ETF (TLT.US)$, $Vanguard Extended Duration Treasury ETF (EDV.US)$, and $Ishares Iboxx $ Investment Grade Corporate Bond Etf (LQD.US)$. For more details, click here to continue reading!
But before other recaps, let's look at something different:
What's Moo'ed?
"What's Moo'ed" is a space that captures fun, newsworthy, jaw-dropping and sometimes confusing (lmao) news clips for mooers so that you know this is a colorful world (or a weird and speechless one).
1. The real "dirty" talk ![]()
People who enjoy eating dirt, known as 'Crunchers,' are not keeping this habit a secret. Instead, these unabashed dirt enthusiasts are openly sharing the supposed health and beauty advantages of eating soil across the internet. One health advantage is obvious: they make the rest of us look smarter.
2. Don't be so talkative! ![]()
Voiceitt, an Israeli company, is developing AI-powered speech recognition technology that helps people with speech impairments from conditions like cerebral palsy and Parkinson's communicate more effectively with others and digital devices, addressing the frequent misunderstandings they face with standard smart speakers and AI assistants.
A nice move indeed: now speechless people can really speech less.
3. Coffee costs too much fee! ![]()
According to Gavin Fridell, a professor at St. Mary’s University, coffee bean prices have reached their highest level in over a decade and are likely to climb further due to severe droughts affecting two of the world's largest coffee producers.
Well, the best solution is to delay work starting time so that we don't need coffee in the morning. Or, just replace coffee with one glance at your account balance. You won't feel sleepy immediately. Trust me.
Okay, let's dive back to the syrup:
Plan Your TFSA: CIBC Recommends Now Is the Time for Canadian Dividends
In an August research note, CIBC analyst Ian de Verteuil highlighted a potential shift in Canadian investment trends due to decreasing interest rates. He projected that continued rate drops could lead Canadian investors to move around $220 billion (US$161 billion) from fixed-income products into dividend-paying stocks.
This shift follows a trend where rising rates previously pushed over $200 billion into short-term fixed-income products. De Verteuil noted the challenge Canadian investors face in finding high yields, citing the lack of a municipal bond market and a very limited high-yield bond market in Canada. Read more>>
Let's see what other mooers are talking about in the past week!
Interest rates influence stock market valuations. Warren Buffett compares them to gravity: “Interest rates are to the value of assets what gravity is to matter.”
So lower interest rates = higher stock prices?
It depends… on the strength of America’s economy.
When the Fed cuts rates because we’re headed into a recession, things get messy. It’s happened a dozen times since 1970, and stock market performance in the next year has historically been all over the map.
Outcomes range from down 36% to up 34% for the S&P 500. Messy!
Stocks perform much better after rate cuts when the economy keeps humming.
My take: Don’t try to make money trading stocks based on big “macro” events. Instead, invest in great businesses that’ll thrive regardless of what the Fed does.
here's my entry, basically mostly stocks and REITs to take advantage of the interest rate cut theme or those I felt is under appreciated counters so I hoard them and wait for them to get appreciated so I can sell for a better price. I tried to get those counters that at least have a good business performance and pay some dividends every year so that if I got it wrong at least I have a passive income position to compensate me for my mistakes. besides having passive income is never a bad thing except that active income usually beat passive income. but at least we all want to have some passive income I guess and why not turn our mistakes into a passive income stream?
Surprising Fact![]()
The top-performing stock on the S&P was not a big tech stock or a stock particularly highly correlated to the rate environment. Rather it was Darden Restaurants, the parent company of several restaurant chains including Olive Garden and LongHorn Steakhouse, as its shares spiked 8.3%. The gain was most likely not due to Wall Street’s hopes of rate cuts igniting a major appetite for breadsticks, but rather a reaction to Darden’s partnership with Uber Eats announced Thursday morning.
The top-performing stock on the S&P was not a big tech stock or a stock particularly highly correlated to the rate environment. Rather it was Darden Restaurants, the parent company of several restaurant chains including Olive Garden and LongHorn Steakhouse, as its shares spiked 8.3%. The gain was most likely not due to Wall Street’s hopes of rate cuts igniting a major appetite for breadsticks, but rather a reaction to Darden’s partnership with Uber Eats announced Thursday morning.
What do you think of rate cut, high dividend investing and other stuff? And what's your take on other hot issues in the past week? How can they earn you more money(we pray that for you)?
Share your stories, ideas, feelings and emojis in the comments below:
Event time: From now until September 29, 2024, at 24:00 ET time.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
Read more
Comment
Sign in to post a comment
mr_cashcow : For sure there will be opportunities during low interest environment however I would take a more cautious approach moving forward as we want a soft landing and not the alternative![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
ATM it seems bonds are doing really well so that is something to look forward to![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
102362254 : The recent Fed rate cut, likely to boost the economy amid mixed signals, makes high dividend investing appealing for steady income in a low-rate environment. Also in focus is the debate over future cuts and their impact on jobs.
Jason Fung : Agree with the above comment that the rate cut should favour high dividend stocks again, especially blue chip stocks that pay high dividend since you cannot no longer make risk free 5% return by buying Treasury bond.
Meme_Short_Queen : inflation will be back soon big time - brace for oil price to surge to the moon.
hanxi shang : The Federal Reserve and Wall Street collude to take advantage of retail investors back and forth.
john song : more to come
73279472 : i