Well, we are looking at the major US stock averages soaring this morning with the Dow and Nasdaq up triple digits.
This week, big tech stocks pulled back and pulled the S&P 500 lower this week.
Now markets are pricing in around a 7% chance of a rate cut at the Fed's September meeting, but we are anticipating Jackson Hole this morning, as Jay Powell will be speaking in less than 10 minutes.
But if Powell does strike a more hawkish tone that could cool the rally, and all eyes are on how he threads the needle between inflation control and jobs.
Well joining me without further ado is Peter Tuchman, senior floor trader at Trade Moss.
Happy Friday.
Thank you so much for joining me.
So less than 10 minutes to go until Jay Powell speaks.
What are your expectations?
You know what?
My gut is he's going to set the stage.
I mean, I think since the last meeting, obviously we saw that was sort of the timing was so odd, right?
The last meeting, you know.
I felt that we had even talked about it.
I felt he was going to pivot because we had seen GDP numbers come in that day and I thought he was, I thought he was ripe to pivot on that last meeting.
However, curiously enough, two days after the last Fed meeting, we saw all that economic data come in, right?
We saw a jobs number came in that was disappointing.
Retail sales were disappointing.
And so since that last meeting we've set the stage for him to do the cut.
And so I think, you know, at one.
A week and a half ago there was a spike up to 90% chance of a September cut.
It feels like it's, it's the right thing to do.
I think we're, you know, one of the reasons he did not cut over the last month and so is because we were in a lower slow growth landscape over the tariffs, right?
Now a lot of the tariffs are settled.
We're looking at a 10-15%, you know, tariff basis and so that sets the stage for the And with this weak economic data that's coming in, it sets the stage for the cut to be ready and ripe.
My gut is he's going to say something.
He didn't even give everyone an inkling on that last meeting.
And so, you know, there was dissent, right?
An important note is that there was dissent.
That meeting was the first time since 1983 where there was dissent by two Fed governors around his decision.
And so while I know he doesn't cave to Mr.
Trump's.
Press.
I would imagine that his fellow governors will, it will, it will impress upon him that the time is right.
Yeah, and Peter speaking of pressure, we did see big tech under pressure this week.
So tell me what's happening below the surface.
You know, it's kind of curious.
I mean, you know, it felt like rotation to me.
It felt like a time, you know, once stocks start to roll over and we see that, you know, the timing seems to be right.
In the end of the year it's been a super solid.
These have been the outperformers, you know, and at some point people need to position themselves.
Well, you know, we are looking at, I did an interview with Cameron Dawson the other day and she talked about that we are about to enter unchartered waters when it comes to the new Fed.
We know that Mr.
Powell is on his way out, you know, and and his time is done.
And so whoever is going to be in there, their decision making is going to be more based.
What Mr.
Trump wants done and then the economic, which is what Mr.
Powell has been holding firm on.
And so people could be anticipating, you know, any number of things happening.
I know there's a big play out there.
There's a big put bet in the option market on the queues, right?
That's been that's been molding around for a little while.
So there are people who feel that the market is pulling back.
Maybe that's spreading a little bit of a rotation, but you know what, it is not.
It was fascinating.
It lasted about 4 days.
We're seeing it turn around and you know what, sometimes when these stocks rotate, look, they've been the outperformers.
We're seeing, we're seeing it firming up a little bit.
We saw Palanter, 5 days in a row that stock has been the flavor of the year, the flavor of the last couple of years, it's outperformed almost everything that in Nvidia, Mac 7, but you know what, look, 4 days it was right for a little bit of a pullback.
We're already seeing it turn.
Palantirer at one point was down 15%.
The other day it only closed down 1, so we're starting to see the buyers come back in, you know, some people felt, look, we knew that Citroen had come out with with that the that the valuation on Pallanttier, which has had a run from 37 to 180, was maybe a little bit frothy.
People were buying it with irrational abandon and now a pullback seems OK, you know, I think once again we're seeing where the pullback is more of a buying. than any kind of foresight that we're really going to have some kind of a bubble or a big sell off and finally we have about 60 seconds here.
So the American consumer, we got earnings out from some key retailers including Walmart, Target, TJX.
So what does that tell you?
And for shoppers and Americans out there who are thinking well prices are still not coming down, what would you tell them?
Well, I think you know prices are not going to come down.
I think prices are going to go higher. what we're seeing is we saw with Home Depot and we saw with Amazon.
Amazon had good earnings, yet they were down initially after the earnings report because they were, they were the ones that were absorbing their balance sheet was absorbing the higher cost of tariffs, you know, we're seeing each one of these companies.
Home Depot is another one that said that they were in fact, Home Depot said they're going to pass it on to the consumer, and I think that set the stage for For other companies in the retail space to realize that these tariffs are still going to have a heavy effect on their on their forward line and that they are going to have to pass some of these expenses on to the consumer and I think we may see that trickle down not only Home Depot but Target and some of the other mid-range retailers and so that.
The consumer may, you know, look, at the end of the day we have not seen that we're starting to see the impact of tariffs on the consumer.
That's going to stay with us for a little while.
OK, we will have to leave it there and speaking of setting the stage, we know Jay Powell is about to take the stage, so we'll talk on that for sure.
Thank you.
