Rate Cuts at Market Highs! Where Will the S&P 500 Go?
The Fed will hold its most closely watched policy meeting of the year tonight, with markets widely expecting a 25bps rate cut.
The Senate just confirmed Trump’s nominee, Stephen Miran as Fed governor by a 48:47 vote. Meanwhile, a U.S. court dismissed Trump’s criminal charges against current governor Lisa Cook. As a result, tonight’s decision will feature a dramatic four-way lineup: Chair Powell, Trump ally Miran, hawkish Waller, and Cook, who just weathered public scrutiny.
Rate cut at record highs: Can history repeat?
$S&P 500(.SPX)$ has surged over 31% in the past five months, one of the strongest rallies in 20 years, now near 6,600 points—close to all-time highs.
Since 1980, whenever the Fed cut rates with the S&P 500 within 2% of record levels (22 times), the index rose in the following 12 months every single time, averaging +9.8%. If history holds, the S&P 500 could reach 7,247 by Sept 2026.
Inflation vs. growth: Is now the right time to cut?
Despite the market rally, fundamentals are mixed. August CPI rose 0.4% to 2.9%, the highest this year, still above target. Normally, this would argue against easing. But revised labor data shows a weakening job market, easing pressure on the Fed. Still, auto loan delinquencies hit a 14-year high, and tariff impacts could weigh on the economy.
MAGS rotation: Still worth holding?
U.S. equities have lagged EMs overall, but mega-cap tech has dominated:
May: Meta surged, June: Nvidia led, July: AMD took over, August: Tesla & Apple soared, September: Tesla & Google jumped
This year has been a classic “mega-cap rotation” market, with one or two giants posting ~20% monthly gains. The only laggard YTD is $Apple(AAPL)$ —do you see it rebounding?
Questions:
Rate cut: more upside ahead, or already priced in?
Ahead of the decision: trim exposure or stay put?
For 2025: how many bps of cuts can the Fed deliver?
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Yes . Raise
Fundamentals give me pause. August CPI hit 2.9%, above target, while the labor market softens and auto loan delinquencies rise. I expect a rate cut but will watch market reactions before acting.
Mega-cap tech rotation remains strong, from Meta $Meta Platforms, Inc.(META)$ to Nvidia $NVIDIA Corp(NVDA)$ , AMD, Tesla $Tesla Motors(TSLA)$ , and Google $Alphabet(GOOGL)$ , with Apple lagging. I’m holding positions, anticipating a potential Apple $Apple(AAPL)$ rebound, staying invested while managing risk and monitoring possible 2025 cuts.
@TigerStars @Tiger_comments
在做出投资决定之前，我认为关键是“节奏”而不是“方向”。当前美股主要指数的估值并不便宜，很多资金早已提前卡位。此时如果重仓追高，波动稍大就容易被套。我的做法是削减高波动、对利率极敏感的仓位，保留核心资产，同时手握部分现金，以便在市场情绪回调时加码。换句话说，不是彻底撤退，而是降低风险敞口，让自己在不确定中更有回旋余地。
至于2025年美联储能降多少，其实取决于两个变量：通胀下行的速度以及就业市场的韧性。以目前趋势推算，如果核心PCE持续向2%靠拢且失业率稳在4%左右，我认为全年总降幅可能落在75至100个基点之间，最多也就125个基点。换句话说，宽松会持续，但节奏大概率是“慢撒糖”而非“大放水”。投资上，我会保持中性偏多，等待数据给出更清晰的方向，再决定是否加大风险资产的比重。
If the labour market remains weak yet inflation can remain roughly the same or drop in spite of all the tariffs that trump threatened, I think the Fed will deliver a total of 75-100 bps cuts for the rest of this year. @Success88 @Wayneqq @Universe宇宙 @SPOT_ON @Fenger1188 @HelenJanet @LuckyPiggie @Kaixiang @SR050321 @DiAngel come join
參議院剛剛以48：47的投票結果確認了特朗普提名的斯蒂芬·米蘭爲美聯儲理事。與此同時，美國一家法院駁回了特朗普對現任州長麗莎·庫克的刑事指控。因此，今晚的決定將有一個戲劇性的四人陣容：主席鮑威爾、特朗普的盟友米蘭、鷹派沃勒和剛剛經受住公衆監督的庫克。
Here's my humble views for the coins!
1. Rate cut is largely priced in and should be expected. The crux is whether there will be further cuts and how much.
2. The latter is going to swing the market. To be conversativre, I have set some stop losses in place. A cautious investor may want to lock in their profit now.
3. As the US economy is still strong, especially with holiday spending season coming up, I take the view that there should be at least one more cut, totalling 50 basis point cut for 2025.
Bonus value, I think that the average American will grab the chance to refinance their mortgages so I think this sector is going to pop. I bought into $loanDepot, Inc.(LDI)$ (fellow baggers come give a like!)
@CaptainTiger @Daily_Discussion @Buffett Investment Tracker @Bill Gates Holdings @Tiger_comments