Markets have moved to price in a 50 basis point interest rate cut from the Federal Reserve on Wednesday, leaving little surprise if the central bank opts for the larger cut.
"The tech sector, as a sector in the second quarter, we saw earnings growing at a 20% rate. So it's still a very robust level in terms of growth," HSBC head of equity strategy for the Americas Nicole Inui says. "But what we're seeing now is this broadening of earnings growth. So we're seeing other sectors like financials, utilities, healthcare growing at a very similar rate. So tech is less of an outlier of what we saw in the... beginning of the year and in 2023." Inui joins Madison Mills and Seana Smith on Catalysts to talk about where recent tech rallies could broaden out to the rest of the market (^DJI, ^IXIC, ^GSPC) amid the anticipation for the Federal Reserve to begin cutting interest rates. She examines the outlook for tech earnings growth from the Magnificent Seven leaders. "When we look at the market as a whole, it looks like it's trading at a very hefty premium. You take out the Mag Seven, you take out tech, valuations aren't as elevated compared to historical levels. So yes, tech, Mag Seven, you still see strong earnings growth," Inui tells Yahoo Finance. "There is this gap overall when you look at the rest of the of the sectors. But that's clearly reflected in terms of what we're seeing in in valuations." For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Luke Carberry Mogan.
The major indexes (^DJI, ^IXIC, ^GSPC) closed Monday mixed after disappointing iPhone 16 pre-order numbers caused Apple (AAPL) to slip and pull the Nasdaq down along with it. Yahoo Finance senior reporter Jared Blikre analyzes the day’s top market movements, including the surge in cyclical sectors such as utilities (XLU), the weight of the Federal Reserve's interest rate decision later this week, and September's seasonality trends. For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend. This post was written by Ivana Freitas.
Gold nears an all-time high as the dollar weakens ahead of Fed actions.
Fixed income funds led the weekly flows as the market looks to rebound.
On today's episode of Catalysts, Hosts Seana Smith and Madison Mills break down key stories from how an interest rate cut and the election may impact markets to TikTok's legal battle against a potential ban in the US. While tech has certainly spearheaded the market's record growth this year, many investors are gearing up for a potential rotation as interest rates ease. HSBC head of equity strategy for the Americas Nicole Inui explains that the market will likely broaden outside of tech, benefiting sectors like financials (XLF), utilities (XLU), and healthcare (XLV). She adds, "When we look at the market as a whole, it looks like it's trading at a very hefty premium. You take out the Mag Seven, you take out tech, valuations aren't as elevated compared to historical levels. So yes, tech, Mag Seven, you still see strong earnings growth." EY chief economist Greg Daco expects the Federal Reserve to initiate a 25-basis-point cut as it kicks off its rate-easing cycle. However, he notes that the central bank walks a delicate tightrope: "If you ease monetary policy by 25 basis points, it does little to nothing in terms of consumer rates, auto loan rates, mortgage rates, very little. But the risks are asymmetric. If the Fed does not ease monetary policy by as much as markets are anticipating, then you'll actually see a repricing of rates and you're going to see upward movement in terms of rates, and that could damage consumer spending activity, housing activity, business investment. That is the real risk right now." Meanwhile, TikTok is in court on Monday for a key hearing in its ongoing battle to block a law that could ban the app in the US. Rachel Tipograph, the CEO of e-commerce analytics company MikMak, tells Yahoo Finance that the odds of a TikTok disruption, either through a ban or a sale, are rising. Looking at Snapchat (SNAP) and Meta Platforms (META) stock, the analyst says, “There is an implied probability there that TikTok disruption is more likely than not in the next four months, and I feel that could manifest into either a complete sale, complete ban, or somewhere in between.” He says this means “eyeballs and money move away from TikTok” which helps Meta and Snapchat. GenWealth Financial Advisors financial advisor and host of "Get Ready for the Future Show" Scott Inman joins Catalysts to discuss how the election may impact markets (^DJI,^GSPC, ^IXIC) and how investors can best prepare their portfolios for the rest of the year. He believes that markets "don't really care about who is in office," noting that they have performed well and GDP (gross domestic product) has grown regardless of a Democratic or Republican administration. This post was written by Melanie Riehl
The Fed is scheduled for the first rate cut since 2020 in its meeting this week. Lower rates stimulate economic growth and provide a boost to the stock market.
The massive success of the blockbuster hit Black Myth: Wukong has reawakened investors to the massive potential of the global gaming industry, and the VanEck Video Gaming and eSports ETF (ESPO) is a great way to gain exposure to this growth. I’m bullish on this gaming-focused ETF based on its strong recent performance and its ability to offer investors diverse geographic exposure to the massive growth potential of the global gaming industry by investing in gaming stocks worldwide. What Is the ES
This ETF has crushed the broader market and could continue to do so.
A three-minute read on how to follow market trends with etf.com’s Markets Monitor tool.