Let's get to the big story breakdown.
While US stocks surging across the board on Friday as the Fed opened the door to rate cuts.
Now we saw tech oil crypto rise, and even rally to record highs yesterday and get this over 420 companies and the S&P 500 joined the rally, but the biggest gains, well, they did come from sectors set to win big if borrowing costs come down.
Joining me on this Monday morning is Peter Tuchman, senior floor trader at Trademark.
Peter, good morning and happy.
Monday.
Thank you.
Well, let's talk about that rally we saw on Friday.
We saw the Dow clear all-time highs and gained triple digits.
So what do you make of that and how many points do you think the Fed will cut this year?
So you know what, look, I mean if you look the rally was extraordinary, and I think what's really important to notice is that look, there's the Fed's been under a lot of pressure to cut rates for a while.
The president's been wanting to do that.
He's been holding his ground because he did not feel it was a Appropriate right his decision making is economic database decision.
He's not going to be swayed by politics or any kind of pressure.
What we've seen since the last Fed meeting that a couple of Wednesdays ago was that the economic data was starting to build a case for a cut.
And so what was curious was I thought, you know, I don't think anybody could have anticipated how aggressively he really came out and he unpacked the bag and he really What would you want to call it, he made the table, right?
I mean, he did, you know, it was quite amazing, and I think he really presented us with a complete policy pivot, right?
And I think that caught a lot of people off guard.
So basically, you know, he said clearly that all the economic data that the risk is warranting us to make some cuts here and that whether we look at 25 basis points, Bullard over the weekend was speaking as much as 100 by year end and so you know what.
We've got is I don't think he caved to Mr.
Trump.
My gut is that he just realized that the best case scenario that was being presented economically was calling for cuts.
And usually when we think about the Jackson Hole symposium, it ends up being a snooze fest that comes before Labor Day.
But this week that was not this year it wasn't the case.
But as we look ahead to the coming week, we're getting Nvidia earnings.
So are you having a watch party?
You know what, am I having a watch party?
It is amazing that back in the old days, right, people were having watch parties to watch the Oscars, and now they're having a watch party to watch a video.
I love that for me, you know that one of my biggest thrills is that that all the barriers to entry are down to the market and that people are, everybody is watching the market.
They're watching tech.
They're watching.
The Federal Reserve and you've got tens of millions of young retail traders, old and young retail traders who are getting involved in the market, and I think that was one of the contributing factors to that rally.
You had people who were on the sidelines who were buying it.
You had people who were buying it with enthusiasm and rational exuberance around the fact that the Fed is finally cutting.
You know, because this is an example of they're not cutting because economically things are good.
They're cutting because of the weaker jobs number, because of unemployment going from 4.1 to 4.2, because of a little bit of a weakness in the economy.
And so it's an example of where bad is good because the market's getting what it wants, and I think that's super important.
Yeah, and given the levels where we have the Dow at record highs, Nasdaq, S&P 500, we're seeing year to date gains.
So where should we be cautious and why?
Well, look, I mean, any time in a market for a prolonged period of time, trades at record highs, one should be cautious.
However, we needed the market to break out of the doldrums.
The last 3 weeks have been a market that's been trying to figure out whether do we engage the tariffs, you know, where do we stand geopolitically.
Are we, are we really being being pushed around by earnings?
What is it that's going to be the next either catalyst in the market to go higher or the next shoe to drop that's going to cause this market to sell off?
And we got what we, we, we got one of the of the two.
We got something that showed us that there is a lot of gas to be poured on this fire, that we are going to get a cut, probably 25 to 50 basis points on the 1st September meeting, maybe another 50 by year end, and that these There are things that the market deserves.
The market is going to get.
The table is set.
The bag is unpacked, and the Federal Reserve is there to step in.
However, we do know that this is the last Jackson hole for Mr.
Powell, and we know that the Fed is changing hands.
And you know, Bullard, who spoke over the weekend a lot, is one of the top picks for taking over his his place, and so he spoke about 100 basis points before year end.
So if that's the case, you know, there's always a fine line, you know, is it all going to be beneficial for the market?
Sometimes it's all beneficial, sometimes it's a little bit of 50/50.
Yeah, and finally, Peter, before I let you go, I do want to shift our focus on over to crypto because over the weekend we saw E hit new record highs, and last Friday we saw a Bitcoin rally as well off well off record highs, and this morning we're looking at Bitcoin lower but holding above 111,000.
So what do you make of the price action?
You know what, look, I think that people are buying everything they can get their hands on.
They're feeling that the runway is clear.
For markets to be super solid, so they're buying gold, they're buying crypto, they're buying the S&P 500, they're buying tech.
They're buying everything that's that's not battened down, and I think that's OK, you know, I mean, I'm not here as a financial advisor.
All eyes are going to be on Nvidia earnings, you know, and I think that as we've spoken with a number of people who are big in that space who will remain nameless today.
You know that that there may be bumps in the road along the way.
Have they been hitting on every piston?
Absolutely.
Is there a lot of money to be put into the market?
I think earnings, look, we don't know what the earnings are going to be, but I know that the guidance is going to be solid because the capex expenditure behind Nvidia is going to be big.
And so look, it's going to be a big week.
Note this MSCI, the largest global rebalance.
The index which was supposed to be on Friday, is being rescheduled for tomorrow and that was another one of the contributing factors to the rally on Friday because suddenly everyone with an index order had to buy into the market on Friday and that's going to fuel what's going on this week.
Well, Peter, every week we start the week out together and we end it together, so we'll be talking about this and dissecting those Nvidia earnings on Friday.
Thank you so much for joining.
