After Fed rate cut, the next 6 months will be crucial for investors. Here’s why.
“There still are opportunities here,” Erik Aarts at Touchstone Investments said.
“There still are opportunities here,” Erik Aarts at Touchstone Investments said.
The Invesco QQQ Trust has generated massive 400% returns over the past 10 years.
Tech stocks rallied after the Federal Reserve cut rates 50 basis points, with some of the Magnificent Seven names like Tesla (TSLA) and Nvidia (NVDA) leading the charge. Citi head of US equity strategy Scott Chronert joins Seana Smith and Madison Mills on Catalysts to discuss how to play the tech sector. “It's a buy the news, sell the news reaction to the Fed,” Chronert says. “The leadership this quarter has really been those areas of the market that are perceived beneficiaries of lower rates. So real estate, utilities, even the homebuilder ETFs have been hitting recent highs. In the meantime, tech is still lagging where it was last time the index was through 5,600." “Essentially what you have here… is that a bit of a profit taking on the news in those areas that have been perceived as rate sensitive. And, at the same time, a catch-up move in that mega-cap growth cohort that ultimately does benefit from lower interest rates, but has been a relative laggard thus far this quarter. All told, what you've got is an index moving higher.” Taking a look at the Magnificent 7, Chronert outlines Citi’s view on the group: “We've been arguing for the better part of this year that they're becoming more idiosyncratic in their behavior.” He explains that Nvidia, Apple (AAPL), and Microsoft (MSFT) — who control over 6% of the index — "those companies are going to be important to index price action and I think you're seeing that today. But, what we're focused on from this barbell angle is we want to be holders of those, but when you look at the rate of increase in this and forward-year earnings expectations, it's been a stair-step function for over a year now. It's beginning to decelerate.” For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Naomi Buchanan.
Threadneedle Street added that economic growth in the UK will slow in the second half of this year.
The average rate on a 30-year fixed mortgage has declined to 6.09%, according to the latest data from Freddie Mac. Yahoo Finance Senior Housing Reporter Claire Boston joins Market Domination to break down why mortgage rates have dropped to their lowest level since February 2023. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Melanie Riehl
A swath of central banks followed the Federal Reserve in issuing interest-rate decisions, though most held policy steady: + The **Bank of England** held rates at 5%, as expected. Like the European Central Bank and some others, it started easing ahead of the Fed, cutting in August for the first time in four years. + The **South African Reserve Bank** became the first central bank to cut in the Fed's wake.
The U.S. housing market took a slight hit as Existing Home Sales, a key indicator of the overall economic strength, fell below the forecasted number. The latest data shows that the...
As the Federal Reserve has kicked off its rate easing cycle, Chase Home Lending head of refinance and home equity Nina Gidwaney joins Wealth! to discuss how home buyers and owners should be considering their mortgages. Gidwaney believes that now is a good time for homeowners to consider getting a lower mortgage rate. "If rates go down below 6%, about 4.7 million customers would become in the money for a refinance opportunity. And that's a significant amount of customers who may have bought a home in the last 2 or 3 years and are sitting on that higher rate... and could take advantage of a lower payment," she explains. The lock-in effect has put pressure on the housing market as owners with low mortgage rates are holding off on listing their homes. However, as interest rates and mortgage rates come down, Gidwaney believes the lock-in effect could break up. She tells Yahoo Finance that prospective homebuyers "will start to be willing to purchase a home and be willing to take on a higher rate. And people have to move. They have to sell their home and they have to do other things in their life. So I think it's a great time for customers to start to do that." As the Fed's rate-cutting cycle is largely already priced into mortgage rates, she advises consumers not to try to time the market when looking to buy a home. Instead, she encourages them to speak with mortgage professionals to ensure they receive the best possible rate. Home prices hit a record high in June, and with many choosing to stay in their homes for longer, Gidwaney believes that homeowners should leverage their increased equity: "With mortgage rates the lowest that they've been basically all year, it is a very good time for customers to consider taking that equity and getting a cash-out [refinance], consolidating some of their higher-interest debt, like their credit card or auto loan debt, reducing their overall credit profile. It is a very good time, also, for customers to think about getting a HELOC [home equity line of credit] and using that home equity to their advantage." For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Melanie Riehl
The number of individuals filing for unemployment insurance for the first time, known as Initial Jobless Claims, has seen a significant drop, according to the latest economic...
Sector Update: Financial Stocks Higher Thursday Afternoon