Indices
- Dow 45,834, +434 or +0.96%.
- Nasdaq 22,141 (new record close), +441 or +2.03%.
- S&P 6,584, +103 or +1.59%.
- MSCI EAFE 2758.96, +31.10 or +0.24%.
- USD10Y 4.061%, -2.5bp or -0.61%.
- WTI Crude $62.69 bbl, +$0.82 or +0.13%.
Fed Week!
This week’s focus is squarely upon the Federal Reserve. The Fed is widely expected to cut interest rates by 25 basis points when they conclude their meeting on Wednesday. Since markets have already anticipated this move, it may not drive stocks significantly higher in the short term. In fact, sometimes markets react by “selling the news” after an event they’ve long expected.
If the Fed surprises with a larger 50-basis-point cut, that could unsettle investors instead of boosting confidence—raising questions about whether the economy is weaker than thought and reigniting inflation worries.
Last Week in Review
- Corporate earnings: Oracle’s earnings grabbed headlines. Despite missing expectations, the company raised its long-term cloud revenue outlook dramatically, sending shares up more than 23% for the week. This reminds us that markets almost always look forward, not backward, when evaluating companies.
- Inflation trends: Wholesale prices (PPI) showed signs of easing, with annual core inflation cooling to +2.8%. That’s closer to the Fed’s 2% target. Consumer prices (CPI), however, ticked higher, showing that inflation progress remains uneven.
- Labor market: The job market showed some cracks. Payrolls were revised lower by nearly one million jobs through March, the biggest downward adjustment since 2002. Weekly jobless claims also spiked, suggesting some cooling in employment.
Looking Ahead: September 15-19
The key event this week is the Fed’s decision, with markets placing a 93% chance on at least a 25-basis-point cut. Outside of that, earnings season is essentially over. A few companies, including General Mills and FedEx, will report, but we don’t expect major surprises.
What This Means for You
- Portfolio impact: Short-term market moves around the Fed decision are normal and often driven by headlines. Your portfolio remains positioned for the long term, with diversification across asset classes to help manage this volatility.
- Inflation and rates: While inflation has cooled from its highs, it remains above the Fed’s target. Rate cuts are likely to be gradual, which should support both the economy and financial markets over time.
- Big picture: Individual earnings reports, inflation data, and Fed actions matter day to day—but our focus remains on your long-term goals, not short-term market noise.
Economic Calendar
- Monday – N/A. Earnings: N/A.
- Tuesday – August U.S. Retail Sales. Earnings: N/A.
- Wednesday – FOMC Interest Rate Decision, Fed Chair Powell’s Press Conference. Earnings: General Mills (GIS).
- Thursday – Initial Jobless Claims, August Leading Economic Indicators. Earnings: FedEx (FDX).
- Friday – N/A. Earnings: N/A.
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Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets...Bitcoin, Ethereum, Solana, ACHR, BITB, HPE, ITIB, NVDA, and RIVN.