Well, let's get to the big story down.
Wall Street is higher on this Monday morning with the major US stock averages up by about 0.25% point.
Now keep in mind the S&P 500 is up 32% from its April lows, boosted by expectations that the Fed will start cutting rates.
Now Bush traders may have history on their side since the 70s, the index has gained 15% on average a year after rate cuts resumed following a long pause.
But some are worried that the Fed may be moving too late to avoid a.
Hard landing signs of slowing are starting to emerge in the economy.
Well joining me on this Monday morning is Peter Tuchman, senior floor trader at Trade.
Good morning.
Here it is finally Fed Week, and we are looking at the major stock averages near record highs, and they are set to open higher, but it is Fed Week and a lot going on.
So what's your read on the market right now?
You know what, look, the market feels strong, you know, there are two looks, there are two possibilities here.
This could be a bit of a melt up.
This could be a bit of a short cover and Could be just sort of an anticipation by the rumor sell the news, you know, we are in the midst of a cutting cycle.
We know that, right?
We know that we're going to get some kind of a cut on Wednesday and our gut is that we're going to be in cuts now until the end of the year.
And as we saw last year, what we did in September 100 point basis cut between September and the end of the year.
And so when you're in that kind of a cycle historically, the market responds favorably to that.
It's just the way it's just the way it is and so.
You know, I mean, I would not be trying to short this market here.
You know, one of the things as a trader, right?
We try not to think.
Thinking can get yourself in trouble, you know, and I know as I hear, I sort of have my bit of my ear to the pulse of what people are dying to do here.
And as we know that, you know, before markets pull back they always are trading at record highs.
So where do we go from here?
The market feels like it's strong.
We're going to know a lot this week, right?
The economic data that's coming in is setting the stage for an interest rate cut.
It's the beginning of probably 2 to 3.
By year's end.
Now it's a matter of how the market interprets all of that stuff.
Mr.
Trump is on fire.
He's going around the country as you and I have spoken.
We spoke on Friday about it, you know, what did we, we tried to set up a scenario what would make this market go higher, and it was basically checking off the list.
The deals, deals, deals, right?
We saw that from Lutnick and from Bessen, you know, earnings have been solid 80% or more of the S&P have beat their estimates.
And so that's where we are.
It's the paradox is, you know, are we going to, is that economic data going to really start to falter, and are we going to see a weakness that's going to impact?
We are seeing a weakness and it's a result of the tariffs.
We know that.
But when is it going to be that the that the market stops looking forwardly and says, OK, I kind of think this market really needs a bit of a pullback.
Maybe there's some profit taking to be had, or am I just going to have this irrational enthusiasm and just. and buy and buy it.
Well, Peter, you and I will be watching that Fed meeting very closely, that rate decision and presser by Jay Powell.
But this morning's focus is on Tesla and pre-market trade.
We're looking at shares inching higher.
So what do you make the move?
What do you make of the move by Elon Musk?
You know what, look, we know that Elon pivoted away from the presidency.
We know that all eyes were on him by shareholders to get more involved in the company.
This is sort of a way of him showing confidence.
We've seen this happen with with Warren. we've seen it happen with another, another a number of other CEOs when, you know, not, not for any lack of a strength.
I mean Tesla has been not participating in a lot of the rally because of people's fear that his attention was diverted by all of this administrative stuff and his Trump and that, you know, the love affair that kind of soured and whatnot, but it's a good show of confidence.
It's showing his commitment back to the company and look, everyone should be also aware though, even though Mr.
Mr.
Musk did actually print the price that he bought it at and he's already up $30 to $40 from that level, and the stock is having an incredible surge this morning.
People also should note that when companies announce a buyback or a large purchase of their own stock, people rush in because they hear it and it's on the news and it's like, you know, people should be aware that very often that purchase was done over the last quarter and so while some people may be rushing in thinking it's happening as they speak.
Very often that is a time more of a possibility to short the stock because it's going to pull back rather than buying it.
In this case it really feels like it's an opportunity to buy because the stock's been under pressure for a while.
Yeah, so it does sound as though the competition for the first place for the world's richest person between Larry Ellison and Elon Musk continues this week.
But of course we're going into that Fed meeting.
What asset classes are you paying attention to most?
Well, you know what, look, it really is going to depend on what.
Jay Powell really focuses on.
We know that there's going to be a cut.
We don't know if it's going to be 25 or 50.
That is, that's going to be big.
We're going to be sitting here at 2 o'clock on Wednesday, you know, everyone's going to be sort of, you know, sort of aghast and just sort of holding their breath to see what that is, as we and I talked on Friday, 25 is already locked in.
That's fine.
I don't know if it's priced in, but it's locked in as far as what we know now if he does 50.
My gut is it's ripping the band-aid off.
I think that's a positive thing, right?
But it depends how the market interprets it.
I always sort of leave it up to the market to tell us what it thinks of that information, you know what there are going to be then his news conference if everybody should be aware of that.
2 o'clock if you're a trader, I would have everything off the table because you're guaranteed you're going to see, you know, it's going to look like the EKG of a heart attack as far as the S&P chart goes.
But then at 2:30 when when.
When Jayal and I've been doing this for a long time and we, we, we track that and we, we analyze it and we trade it and so 2:30 is when the news conference starts and everyone is hanging on every word.
We've seen that.
We saw it at Jackson Hole.
We've seen it at the last Fed meeting.
What is his positioning and what is the posturing going into the end of the year and in fact 2026.
Markets are forward looking.
I mean, you know, we know that this is one of his last meetings. right, because my understanding is they're already setting the stage for a transition of him out and somebody else in, but he wants to look at the end of the day we did see dissent on the last meeting, right?
And this time, you know, he did make a major pivot in Jackson Hole and so I'm hoping for a really positive meeting.
Well, Peter, you and I will be back here bright and early on Friday morning.
So let's see what comes out of the Fed and we'll see what the market reaction is.
Thank you so much.
Happy trading, everybody.
