Market Movements: Analyzing Economic Data and Fed Rate Cuts

And now let's get to the big story breakdown.

Markets did hit breaks after a record breaking rally, but we are looking at the major US stock.

Average is higher ahead of the open.

Meanwhile, optimism over Fed rate cuts is losing some steam.

Divisions among policymakers casting doubt on the cuts that will happen this year and also next year.

Joining me on the final Friday of Q3 is Peter Tuchman, senior floor trader at Trade Moss.

Peter, good morning. mouthful.

Oh my God, so we got economic data this morning as well as yesterday.

We saw that 3rd quarter, 2nd quarter GDP growth actually coming in much better than expected and the PCE coming in as expected as well.

But then a new round of tariffs as well as that TikTok deal.

So what do you make of all this?

What is the market?

I mean, I was, you know, I know all the information you gave, but just to hear it in one big mouthful is just extraordinary because basically. there's so many moving parts.

Economic mechanism is a fascinating thing.

And so to understand it and how it affects the markets is one thing and then just to see how it all and then how to try and curate it, right, which is what the Fed's job is is another huge challenge.

And then how do we how do we, you know, what's our, what's our forward looking explanation or understanding on how is this all going to affect us, right?

So you just laid out such an amazing.

Amount of information, most of it all positive, right, more positive than we've been seeing because ever since, you know, ever since Jackson Hole, there was a number of softer economic bits of data that came out about jobless claims and unemployment and things like that.

While we're starting to see that the core PC was right in line, you know, and you're seeing GDP tick up and there was a readjustment, I think, on that number year over year that was up as well.

But you know, you're laying out a. where you know we're getting a lot of deals on the tape and so it's like you know but then again we're getting new tariffs, you know, and then you're seeing, you know, a little weakness in crypto, but you're seeing gold trading at record highs.

You're seeing the market pull back but the pullbacks are very shallow.

I mean, I think it's really important to do that.

We're coming to the end of the 3rd quarter.

We do know that we're in the beginning of a rate cutting cycle, right?

And you know, while we know that bad news is good news and that should be, you know, that the economic weaker.

The the economic data, the more aggressive the Fed is likely to be, and we have that.

It's almost like we're almost now it was a short term engagement of that information, and now we're moving on to the next thing, right?

So how are we going to end out this quarter?

Is it, are we going to have some profit taking or are we going to have some window dressing?

My gut the last couple of days were just sort of a little bit of profit taking, you know, we did see a number of days where the tech sector did pull back, but we saw what was fascinating by yesterday was some really significant. intraday reversals.

Palantir down 4 early in the morning and then ended up being up 10 in change.

So you're starting to see those stocks and a lot of rotation no matter whether the market is going up or down, we're seeing advanced declines be 50/50 across the board.

So it feels like the people who need to buy the market and sort of play catch up, we've spoken about it every Monday and every Friday, that there are the funds, the guys who sort of sold back in February, March, April, and now we're playing catch up are doing it in.

Very determined way.

They know what they want to buy.

They're getting out of some names, getting into others.

We saw that record high in the russell, which is small cap midcap, a lot of it's AI related, hit a record high first time in 2.5 years and then immediately pulled back.

So you know my mouthfuls is just as fascinating but still again it's, you know, at the end of the day it's a net net positive.

Yeah, and I feel as though we could devote an entire podcast to some of these topics that we're talking about.

And as you mentioned, we are approaching the end of the 3rd quarter, about to go into the final quarter of this year, but before that we had that government shutdown, right?

And we're counting down the hours, the days until that deadline, and there are a lot of concerns about that, especially since we're supposed to get that jobs data at the end of next week.

So what are your concerns?

Well, you know what, look, that is always that looming number we've seen it at the end of the day.

I don't think we've ever actually had, you know, they've never done the full shutdown.

So you know, is the market responding?

All I can do being sort of boots on the ground here on the floor, is to say how is all this information impacting the market?

The market tells you what it thinks of all this information.

Everyone here used to always joke.

I'd always say the market's doing what it wants to do.

At the end of the day, I take the temperature down here.

I take all that information that you laid out, which is just extraordinary.

Right from all different sides and then we see how the market responds because at the end of the day that's all we want to really know.

I mean we want to know that you know that the economy is solid and we don't want tariffs to be too big and we don't want a lot of this sort of chaos that very often goes along with with the new administration.

But at the end of the day it's it's how does the market react, the markets.

Acting favorably once again on a Friday coming into the end of the quarter, we're not pulling back.

We had 3 very shallow sell off days.

I mean, couldn't have been more shallow, right?

There was that one day where we ended up, we pulled back and there was an intraday reversal and we ended up closing even money.

So I'm not seeing any heavy sell pressure at all.

We're seeing good solid volume and you know it just seems OK.

And finally, before I let you go, are there any key levels you're watching across asset classes?

You know, look, I mean, it's so hard.

We, we hit up against 46,000 on the Dow.

We pulled back a little bit, but so minorly.

I mean those are great levels, 6700 on the S&P.

We pulled back over that.

I think that's a wonderful key level, you know, Nasdaq, it's amazing the enthusiasm around tech that just keeps going, as we know from from our guru that we still are in the 2nd or 3rd inning of this revolution and that the amount of money that we're seeing be put in, whether it's Oracle, whether it's Microsoft.

It's me, whether it's Google, hundreds of billions of dollars going into the building of data centers and all that.

I saw an interesting piece the other day that said that that it was a gentleman, I guess it was CEO of SoftBank, who said actually Nvidia is undervalued gauging from what is going to be necessary to be able to support the gigabyte and the chip demand in the next coming years.

So you know it's even bigger than we thought, right?

And so with all that coming at us and the markets being forward looking.

You know, I think these levels could be support once again and we could be going higher.

Well, Peter, we'll see how all of this plays out in Friday's session and we'll be back bright and early on Monday.

So everybody.