Let's get to the big story breakdown.
While the Dow Jones Industrial Average was striking distance of a new record high.
Now the market rally is broadening beyond just tech, with small caps tracking the major averages higher, and that spike came as United Health rallied after a regulatory filing revealed Buffett's Berkshire Hathaway took a $1.6 billion stake in the healthcare giant.
Well, as we kick off a new trading week, I'm joined by Peter Tuchman, senior floor trader at Trademos.
Peter, happy Monday.
Good morning.
Thanks.
Well, we are looking at Dow futures flat, and this does come after back to back gains for the major stock averages.
So where do we go this week?
So you know what, look, you and I talked about it that August is traditionally a weaker month, but we're not really seeing it, you know.
We are, we are, we've been strong.
We're setting up fundamentals that are strong earnings season has been really good.
We've got some guidance going.
We've not been sort of, you know, while we're seeing the impact of tariffs on. retail numbers and inflation a little bit.
We're not seeing it that much on the market, right?
You know, for a while there, every time you know a comment was being made about tariffs, it would send the market sort of, you know, falling off a cliff a little bit.
We're not seeing that that much anymore, so I think we've disengaged it.
We've got sort of a positive sense that deals are being made and you know, and they are.
We know that for the last number of months while we were focused on the Middle East and some other things, obviously it's been a lot of backdoor room or backdoor diplomacy.
Going on and I think the deals are across the board being made.
Yes, and Peter, all eyes are on the nation's capital today as European leaders gather with Trump in the nation's capital.
So what are you paying attention to this afternoon and of course with Pa speaking in Wyoming on Friday, there's a lot at stake here, isn't there?
You know what, look, I don't think you know markets historically don't really engage what's going on politically, right?
Obviously there's a lot at stake here with the chats with Putin and obviously the chats with.
All of our trading partners, that's why that's super important.
However, what's the most important thing is obviously power right now.
I think the sense of whether we do get the cuts we're looking at, you would just talk right before you came on that we're off of the 90% high probability that we are going to get cuts, but it still seems that we are setting the stage for that, and I think that will be good, you know, we're seeing that GDP was up a week and a half ago, which is a good thing, so we're not fearful of stagflation.
In fact, we do cut the rates which we're looking for and I think the market's anticipating that whether it's, you know, whether it's priced in already or not, my gut is that once we settle that down and we do get a cut, I think the market's runway towards the future is super solid, and Peter, as we're both speaking, it does look as though the probability for September 17th rate cut is at 82.9%, and we've seen that number fluctuate following the inflation figures last week, but as we head into this week, we're keeping.
Our eyes on big box retail earnings, right?
So we have Walmart, Target, TJX, as well as Lowe's.
What are you watching for in those numbers?
You know, look, those are really a key indicator to what the general public is is how their spending habits are and the impact of inflation of tariffs are on the general public.
Think about it.
Walmart, Target, Home Depot.
I mean these are the names that Middle America is going to to shop.
And so while we've seen some retail numbers a little bit less.
A less less positive than we expected, you know, we're going to see what happens here and it's all a matter of how, how we are being impacted by by tariffs and whether those companies per se, we know that Amazon showed sort of a little weakness right out of the gate even though they had super solid earnings because they are absorbing a lot of the cost of tariffs.
We're going to see what happens with the guidance coming out of Walmart, Home Depot, Target, the names that you just discussed, and see how much are they going.
To absorb the tariff expense and how much is going to be passed on to the consumer and so this is very telling and you know, and it will also have some effect on how Mr.
Powell positions himself.
But right now I think we've set the stage.
We have enough back to back weeks of jobs reports of inflation of the raise in unemployment from 4.1% to 4.2%.
That may not seem a lot to the general public, but in fact 1/10 of a point is a big deal and so we are setting ourselves up.
For a cut, you know, I was speaking to Dan Dan Ives over the weekend.
We're looking, even though Mr.
Besant, the adviser to the president, is asking for a 150 basis point cut, that may be a little severe or drastic, but surely we're going to have a 25 or 50 and then maybe as much as a whole point by year's end.
Yeah, and I want to talk about what this means for the major stock averages, in particular, the S&P 500, because we are looking at 6450.
That was the close on Friday.
Where do we go from here?
You know what, look, I mean, I, you know, my man Dan Ives, who's a lot smarter than I am, is surely looking at a 7 in front of that S&P number by year's end.
We are approaching 45,000 once again.
The Dow has been a little bit of an underperformer as far as closing at record highs as we have, but you and I have spoken.
We had 58 record highs in 2024.
We're now at about 23 record highs already in 2025.
I did not.
And we looked at the beginning of this year, it did not look like this was going to be that kind of a year, but it's proven to be that way.
So I think we're we're in Q3, you know, we get an interest rate cut, you know, we get deals on the table across the board with tariffs.
We settle down with that sort of aggressive narrative from the administration and we get some deals done.
I think we're in good shape.
Well, Peter, you and I will be back here on Friday morning, so let's see what happens this week.
Thank you.
