WEEKLY BUZZ | Total Eclipse of the Fed
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Weekly Buzz
Stocks seesawed between brighter and darker days during this past week, which featured a rare solar eclipse on Monday. However, the major indexes ultimately ended the five-session period slightly as Wall Street tried to gauge from the latest data whether U.S. inflation is under control enough for the Federal Reserve to cut interest rates.
The $S&P 500 Index(.SPX.US$ rose during three of the week’s five sessions, but ultimately ended 1.6% lower for the week at 5,123.41.
Similarly, the $Nasdaq Composite Index(.IXIC.US$ hit an all-time closing high on Thursday, then pulled back on Friday to end with a roughly 0.4% loss for the week at 16,175.09.
Meanwhile, the $Dow Jones Industrial Average(.DJI.US$ shed some 2.4% over five sessions to a 37,983.24 weekly finish.
Anyway, let's dive into the weekly buzzing stock list of this week:
Nvidia ended 0.2% lower for the week as the popular chip company’s stock failed to regain its footing after peaking a month ago.
@72913498: $820 gap fill needs to happen - buy will all your savings then.
Tesla rose 3.7% for the week as the stock partly recovered from an April 2 sell-off that followed the release of disappointing Q1 delivery figures.
Former President Trump’s media company shed 19.7% for the week as it continued to give back much of the gains the stock saw when it first went public on March 26 via a SPAC merger. Shares have lost more than 50% of their value since then.
User said: @Chaim Kamins: It's not about the short-term. I believe it's going to increase value over time.
Chip giant AMD lost 4.2% for the week, with all of the losses coming Friday, when the stock fell on reports that China might soon take steps to block U.S. semiconductors from Chinese electronics.
@The Comeback Kid: Looks like it is going to $150. Good luck [to those] who are long the stock.
Apple gained 4.1% for the week after the tech giant bounced back Thursday and Friday after hitting a $167.11 5-1/2-month intraday low on Wednesday.
Chinese EV Maker Nio sank 6.4%, again with almost all losses coming on Friday. Shares fell on word that U.S. Sen. Sherrod Brown (D-Ohio) called for a ban on U.S. imports of Chinese EVs, which he alleged are “threaten Ohio auto jobs, and our national and economic security.” China doesn’t currently export EVs to America.
@Givememymoney: Properly hammered today.
SoundHound lost 15.4% during the week as investors cooled on the AI play, which soared in February on word that Nvidia had invested in the company.
@Labi_7718: No hope already ... dead end.
Popular chip stock SMCI gave back 5.2% during the week as shares retrenched following a more than 200% gain so far in 2024.
@102956953: Buy below $900
Reddit shed 11.1% during the week as investor enthusiasm for the social-media stock continued to ease following its March 22 initial public offering. Shares have lost more than 40% since their March 26 intraday peak.
@Scrangus: Thinking it'll break $50 again?
Thanks for reading!
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Weekly Topic
How many Federal Reserve rate cuts do you expect this year and why?
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Mr Trecherous :
SpyderCall : Congrats to the winners!
SpyderCall Mr Trecherous: Is the news legit? Like, has anybody done some legitimate fact checking on it?
mr_cashcow : My best guess is 2 rate cuts this year...but then again it is the FED so who knows? Remember never go full clown
Sending my regards to all reward points winners
102362254 : How many Federal Reserve rate cuts do you expect this year and why?
I’m expecting two Fed rate cuts this year due to inflation concerns. The Fed aims to balance inflation control and growth promotion. Strong labor market signals gradual rate reductions, but geopolitics could change this.
Mr Trecherous SpyderCall: Who would you actually trust Spy??
HuatLady : Despite early signs of high inflation, some Fed officials still anticipate 3 interest rates cut in 2024. Jerome Powell emphasized that the recent inflation surge hasn't changed their economic outlook much, expecting inflation to cool gradually. Although economists are uncertain, the Feds projections supported these expected rates reductions.
Regardless of whether it's a 3 or 2 rate cuts, my investment strategy remains consistent: buying and investing in high quality stocks for the long term.
SpyderCall Mr Trecherous: I see your point.
HuatEver : With inflation on the rise, the Fed is hesitant to lower rates. Experts foresee a possible cut in 2024, maybe at the June 12 meeting, to address inflation. The Fed plans to wait for signs of inflation easing before making a move. Market reactions indicate a cautious stance. BlackRock’s CEO, Larry Fink predicts a maximum of 2 rate cuts this year. I, too, anticipate 2 rate cuts. We can keep track of the Fed’s decision as economic conditions evolve.
BelleWeather : Powell has acted consistently with his ongoing statements. These have been ignored at times, for example when he said three cuts last year, and traders anticipated six. I expect he will remain consistent, and follow the data. He has said before that the 3% is within the range for cuts in the future, pending further data points. I think, the current geopolitical conditions aside, that inflation will continue to lower as housing costs are a huge contributor to inflation. This is a lagging indicator, in that the rate hikes take time to reflect in housing numbers. The uptick in oil, including due to recent conflict, is concerning, but as far as cuts are concerned, energy isn’t considered by the Fed. Their mandate balances only employment and inflation, not including food and energy. I think that employment may in fact weaken, but inflation will take time to get to 2%, and a number greater than that would still be acceptable to the Fed because of lagging factors. I don’t prefer to predictions, and if I were in charge of such things, I’d not be inclined to lower rates any time soon. The need to raise them again is too likely and would be more problematic than ‘higher for longer.’ If I had to guess, I think that in 2024, zero to one cut is most likely, two is possible, and three is now unlikely.
For my investing and trading strategies, I will certainly keep close tabs on the Fed-speak. As one example, other than LEAPS, I’m holding off on buying shares of and contracts on equities that are very sensitive to rates, like unprofitable and debt laden small biopharma companies (and some other sectors.) When Powell signals cuts are coming soon, I will enter those positions and contracts. The higher rates have created opportunities now, in many sectors. One equity-type that I am building positions in are REITs. The higher rates forced restructuring of these and some are attractive now. (I like VICI, and various industrial, storage and data center REITs.)
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