Market Movements: Analyzing the Impact of Inflation and Fed Rate Cuts

Wall Street is lower on the heels of hotter than expected wholesale inflation figures.

In the previous session, stocks rallied as investors doubled down on that that a Fed Reserve rate cut is coming soon as early as September.

Now there are growing expectations of a jumbo move from the central bank, or at least more to come this year.

Treasury Secretary Scott Besson added fuel to that fire, calling for a cut of up to 17.

5 basis points citing signs of a weakening job market.

Well joining me live here at the New York Stock Exchange is Jonathan Corpinia, senior managing partner at Meridian Equity Partners.

Jonathan, thank you so much for joining me.

Good morning, Remy.

Well, we saw the Nasdaq and S&P 500 close at yet another record high in the previous session, and we are looking at the averages melting up.

So Price action and why we're seeing what we're seeing it this morning, right?

So we've had a nice move in the market to the upside, I think, you know, when looking at it, there's a couple of factors that are there.

One is earnings season has certainly helped as it historically does, and the Economic data that we've received prior to today has has given us more confidence that the Fed is going to be cutting rates come September.

So that's been all been priced into this upswing that we've seen in the market.

Putting all that aside, we've had a pretty strong run.

Uh, not only in the last few trading sessions, but from the lows in April.

So at some point here we're going to get days like today where you're going to see profit taking, you're going to see a little bit of a concern of how high can this market trade in such a short period of time.

What's going to be the catalyst, maybe we'll get a slight pull off pullback.

But I think overall, generally speaking, we've had a tremendous run in the market, very good performance.

I think our economy has gotten better.

I think our Fed is getting to the point where they're being forced into making that final decision, which will be their first decision as to cutting rates.

The question now is not when and if, but how much will they cut.

Yeah, and indeed the countdown is on to the next Fed Reserve meeting in September, but before that we will be getting Jackson Hole, Wyoming, an event that we watch for as we head into the end of the summer months.

But one thing I do want to ask you about is what we're seeing when it comes to market breath.

Tell us what's going on.

Yeah, so when we see the market move the way it has as of recently, we see money flow into the kind of the old reliables, right, the ones that people are familiar with and comfortable with, and then you.

All that with earnings season too, right, as we go through earnings season, it seems like the reporting ones are the popular ones, but in general, you know, tech has certainly helped this rally and in the past few trading sessions we've seen the small caps, so Russell 2000 perform very well seeing returns in 3.54% in 2 days to the upside, which is a pretty significant move.

So not surprised that we're going to see a little bit of a pullback in that overall today.

But I think right now investors are kind of spreading their money.

Out making sure that they're covering all their bases because they want to participate in the upside, but you also want to protect yourself in case this market does seem to turn.

And when I say turn, it's going to be OK if we get a 1% pullback or a 2% pullback considering where we've been and considering what's gone on in our in our markets, but leading into the, you know, the end of the third quarter, 4th quarter, there's a lot that's in front of us.

Let's not discount our geopolitical issues and concerns that are there.

We've got a pretty Important meeting that's going to occur in Alaska on Friday.

So there's still a lot of different issues that are out there that can put some pressure on our markets.

Yeah, a lot of tailwinds that we'll be paying attention to for sure.

Now finally, Jonathan, before I let you go here at the New York Stock Exchange yesterday we had yet another IPO this morning.

The bell was rung by Miami International celebrating its IPO.

So I do want to get your take on factors whether we're talking. about IPOs M&A or growth and value.

So where are the opportunities right now, right?

I mean, it's great to see the IPO market heating up again.

I think that's something that you and I spoke about as we're coming into the end of last year and waiting for these companies that have been on the calendar that have been waiting to come public to look for that right time, that right sweet spot to really move forward.

We started off the year with the market performing OK and then we had the sell off which then paused a lot of our syndicates.

Activity now since April, the market has rebounded.

We're starting to see a lot more chatter, a lot more companies coming public, raising capital as this timing seems to be right as of now.

I think it's a great indication for our markets.

I also think it's a great indication for our financial sector, as clearly some of the big names that are there in that sector benefit from all these deals that come through.

And finally, before I let you go, I understand that Meridian and Equity Partners is ringing the closing bell today.

It's 20th anniversary.

So that really speaks to how long you've been on the trading floor and how many market cycles you've been through.

So given what's expected to come out of the Federal Reserve and what we're seeing in the stock market, do you think this rally is sustainable in the long run?

And when we get those small down days, as you mentioned, what is your advice to viewers out there who might be looking at red and freaking out?

Yeah, really honored to be ringing the closing bell.

Today started the company 2 years ago, so the New York Stock Exchange is honoring us, which is a wonderful occasion.

Yeah, listen, I think, I think our markets have traded in a way where we've gotten pretty lofty and I think our markets are somewhat fragile at these levels here.

Any headline I think can move our market to the downside.

It's going to be interesting to see how this all plays out with interest rates and what the Fed does and and our trade deals, our trade conversations, how tariffs are going to implement.

How they're going to impact our economy, Main Street investors, how that all is going to play out.

So I think there's a lot of uncertainty that's in front of us.

I'll take the green screens for now, but I wouldn't be surprised if we start to see some sort of a pullback when you're trading the market, right, you have to be very agile when you're investing in the market.

I think when you start to see these pullbacks in the market, it's certainly time to start buying stocks that you've been watching for quite some time that are trading at cheaper prices than they were before.

OK, Jonathan, always great to have you here.

Congratulations on 20 years, and we'll be watching that closing bell ceremony today.

Thank you so much, Jonathan.