Ahead of the Curve

Market Overview

• Less than 10 days after the Fed’s 50 basis point rate cut, the markets are posting favorable gains. 

• When the Fed has cut rates while the stock market was near all-time highs, forward 12-month returns have been positive 100% of the time.

• The chart below shows:

  • When the Fed cut rates

  • How close the S&P was to all-time highs

  • Index performance after 1, 3, 6, and 12 months

Economic Insights You Need to Know

• U.S. GDP grew by 3% in Q2 2024, exceeding expectations, with another 3% growth predicted for Q3.

• The August Personal Consumption Expenditures (PCE) index came in at 2.2%, moving closer toward the Federal Reserve's target of 2%.

• The number of individuals working part-time jobs while actively seeking full-time employment increased in August by 14.4% to 4.8 Million from 4.2 Million. This indicator is often used when determining the onset of a recession.

  
  

  

  
  

• Full-time job numbers have steadily declined for seven consecutive months.

• Bitcoin surpassed $65,000 for the first time since July.

• U.S. ETFs reached a record $10 trillion in assets, gaining popularity for their low fees and exposure to a broad range of sectors including real estate, AI, commodities, and cryptocurrencies.

Stock of the Week: Tesla

• Stock of the week: Tesla’s stock climbed 7.84% this week, up 21% in September. Lower U.S. interest rates have made car payments more affordable, driving demand.

• China, which accounts for one-third of Tesla’s sales, benefited from economic stimulus measures, boosting consumer spending.

• Tesla reports its third-quarter delivery numbers on Oct. 2 and will unveil its Robotaxi plans to investors on Oct. 10.

  
  

U.S. Business News

• OpenAI is transitioning from non-profit to for-profit status, eyeing a $150 billion valuation, while CTO Mira Murati has stepped down, adding to recent leadership exits.

• Dell, Palantir, and Ernie Indemnity joined the S&P 500, replacing American Airlines, Etsy, and BioRad Labs. 

• The U.S. Department of Justice sued Visa for monopolizing debit markets.

• Boeing's machinist strike continues, costing $50 million per day. Boeing offered the 33,000 employees a 30% pay raise over four years, but the union is pushing for more.

• National security concerns have prompted the U.S. Commerce Department to propose a ban on the sale and import of vehicles equipped with Chinese or Russian technology. Although only a small number of U.S. vehicles currently use this technology, the move is intended to safeguard American data and promote the use of American-made cars.

• Microsoft signed a 20-year agreement with Constellation Energy to help power its AI operations using nuclear energy from the Three Mile Island plant.

• Supermicro is under DOJ investigation for alleged accounting issues and ties to Russia, delaying its 2024 annual report.

• Hurricane Helene hit Florida’s Gulf Coast, causing deadly storm surges and flooding throughout the Southeast. As of Sept. 28 the death toll has risen to 30.

Overseas Update

• China's $400B Stimulus: China’s central bank unveiled a $400 billion stimulus package to combat deflation and boost demand. Measures include lowering interest rates and reserve requirements, with hopes to stimulate borrowing and economic growth. Investors responded positively, with Chinese stocks hitting their best levels since 2008. This stimulus follows the U.S.'s recent decision to cut interest rates, a move designed to stabilize the value of the yuan.

Sports Update

• MLB

  • Several teams, including the Dodgers, Yankees, Phillies, Brewers, Guardians, and Astros, have clinched their divisions and are ready for the postseason. The playoffs start Oct. 1.

• NFL 

  • Thursday Night Football: The Dallas Cowboys secured their 7th straight win, defeating NFC East rival New York Giants 20-15.

  • Sunday Night Football: The Baltimore Ravens will host the Buffalo Bills.

  • Monday Night Football: The Tennessee Titans face off against the Miami Dolphins.

• NCAA Football 

  • SEC: No. 2 Georgia vs. No. 4 Alabama 

  • Big-10: No. 9 Penn State vs. No. 19 Illinois.

  • ACC: No. 16 Notre Dame vs. No. 15 Louisville

  • Big-12: No. 20 Oklahoma State vs. No. 23 Kansas 

    
    

Stay with us for more insights next week.

Disclaimer: This is not financial advice or a recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.