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📈 Fed's Rate Cut Party
Moderna's surprise profit, Qualcomm pops on earnings beat, Nissan to cut jobs and production, Honda's massive profit decline, Fed's anticipated rate cut
Evelio Silvera
November 07, 2024
Good morning.
⚡ The Fast Five → Moderna's surprise profit, Qualcomm pops on earnings beat, Nissan to cut jobs and production, Honda's massive profit decline, Fed's anticipated rate cut
🔎 Market Trends → Stocks surge to record highs as Trump returns to presidency; Futures steady after Trump-fueled rally, Fed's rate decision awaited
And now…
⏱️ Your 5-minute briefing for Thursday, November 7, 2024:
MARKET BRIEF
Before the Open
As of market close 11/6/2024.
Pre-Market
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Fear & Greed
Markets in Review
Banks Lead Market Blitz
Dow surges 3.6% to 43,729, while S&P 500 hits fresh peak at 5,929. Nasdaq jumps 3% to 18,983.
The Big Picture:
Trump's victory triggered a shift in market sentiment, unleashing a tsunami of buying across financial sectors. Wall Street's animal spirits roared back to life, particularly in areas poised to benefit from potential deregulation and tax policies.
Oil retreated slightly to $71.81 per barrel, while gold tumbled nearly 3% to $2,669 as investors pivoted away from safe havens. Treasury yields surged, with the 10-year jumping 14.5 basis points to 4.43%.
Market Movers:
Banks lead the charge: Financial titans ($GS, $JPM) soared 12-13% on expectations of lighter regulatory touch and steeper yield curve
Tesla's Trump bump: $TSLA rocketed 14.75% as investors bet on favorable EV policies and potential trade barriers benefiting domestic manufacturers
Tech hardware stumbles: $SMCI plunged 18% despite clearing accounting concerns, showing markets remain skittish about governance issues in AI-adjacent names
What They’re Saying:
"U.S. large-cap equities could benefit from a combination of deregulation and potentially additional tax cuts," notes Wells Fargo Investment Institute, highlighting a potentially bullish backdrop for domestic stocks.
WHAT WE’RE WATCHING
Events
Today: Federal Reserve - Interest Rates - 2:00pm
Why You Should Care: Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
Today: Dept. of Labor - Unemployment Claims - 8:30am
Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.
Earnings Reports
Today: Arista, Airbnb, Duke Energy, Motorola
Tomorrow: Telus, NRG Energy, Ubiquiti, Paramount Global, Lamar
MARKET BRIEF
Leading News
Fed's Rate Cut Game Plan
Why it matters:
The Fed’s expected rate cut signals a strategic pivot in response to slowing growth — and that means potential opportunities for investors looking to capitalize on market shifts.
The big picture:
The Federal Reserve seems poised to tap the brakes on rates in an effort to stimulate borrowing and spending. While inflation remains on the Fed’s radar, the economic slowdown appears to be winning their focus. For savvy investors, this pivot could mean a window of opportunity to adjust portfolios for growth.
For equities, lower rates often fuel gains by making borrowing cheaper and lifting valuations on growth stocks. Bonds, too, get a boost as prices typically rise when rates fall, offering a safer harbor for more conservative investors. If the Fed cuts, it’s essentially signaling they’ll support the economy — a bullish cue for risk-takers willing to adjust.
Crypto enthusiasts may also see some positive ripples. Bitcoin (BTC) and other digital assets have historically responded well to rate cuts, as a lower dollar value often makes decentralized assets more attractive.
Go deeper:
Stocks on the rise: With rates dropping, growth stocks like tech and consumer goods often get a leg up. Think tickers like AAPL and AMZN.
Bond advantage: Falling rates drive bond prices higher, rewarding income-focused investors.
Crypto catalyst: Rate cuts can add fuel to the decentralized finance fire, with Bitcoin (BTC) and Ethereum (ETH) potentially seeing upticks.
What they're saying:
“A rate cut now means the Fed is prioritizing economic stability over inflation concerns,” says economist Tom Lee. “It’s a net positive for equities in particular.”
The bottom line:
As the Fed cuts rates, think about positioning for growth. It’s a move that underscores the Fed’s commitment to keeping the economy moving — and investors should follow suit. Consider adding exposure to growth stocks and keeping an eye on digital assets for the ripple effects.
Headlines
Moderna posts surprise profit (link)
Amazon to invest $1.3 billion in Italy data centre business (link)
Qualcomm pops on chipmaker’s earnings and revenue beat (link)
Nissan to axe 9,000 jobs, cut production on weak China, US sales (link)
Honda Reports 19.7% Profit Decline (link)
Lyft shares soar 20% on results and autonomous-vehicle partnership (link)
Canada orders TikTok to close business, allows app to function (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to netcapgirl
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