“I think there’s a lot of that manufacturing tilt coming back to the U.S.” – 03:05

Luke Lloyd, CEO & Founder of Lloyd Financial Group, joins Remy Blaire at the New York Stock Exchange to discuss the highly anticipated Fed Day. Investors are eagerly awaiting a potential interest rate cut by the Federal Reserve, with expectations leaning towards a reduction of a quarter basis point. The conversation centers around the implications of this decision and the tone of Chair Powell’s upcoming press conference.

Remy and Luke begin by emphasizing the importance of three key economic factors: inflation, interest rates, and growth. Luke confidently asserts that a 25 basis point cut is imminent, noting that while inflation has decreased to 2.9%, it still hovers above the Fed’s target. He highlights the current economic backdrop, mentioning that liquidity is at all-time highs and government deficits are substantial, which complicates the investment landscape.

As the discussion progresses, Luke shares insights into his firm’s recent portfolio adjustments. After a period of focusing on value stocks, they have begun to incorporate more growth-oriented assets, particularly in the technology sector. He mentions specific stocks, including some recent IPOs, that they are considering for their growth potential, indicating a shift in strategy to adapt to the current market environment.

The conversation then shifts to international markets, where Luke discusses currency risks and policy moves overseas. He notes that while international stocks have performed well this year, his firm has recently sold off those positions in favor of opportunities in North and South America. Luke highlights specific companies, such as DOW and various Mexican stocks, that are well-positioned to benefit from a manufacturing shift back to the U.S.

“I think he continues to suggest that we’re going to be cautious and they’re going to be data dependent.” – 04:14

Michael Reinking, Senior Market Strategist at the NYSE, joins Remy Blaire to discuss the latest economic data releases and their implications as the Federal Reserve begins a significant two-day meeting. The S&P 500 has shown resilience, closing nearly half a percent higher and surpassing the 6600 mark. With the Fed’s rate decision anticipated for the following day, Remy discusses the challenges posed by a cooling labor market and persistent inflation.

The pair explore the recent retail sales numbers, which have come in better than expected, suggesting that fears of a sharp economic decline may be unfounded. However, they also note signs of weakness in housing-related sectors, emphasizing that the retail sales figures are not adjusted for inflation. This distinction indicates that some of the strength in retail may be driven by inflation rather than pure demand.

As they look ahead to the Fed’s rate decision, expected to be a 25-basis point cut, Remy and Michael discuss the potential for dissent among Fed officials and the significance of the summary of economic projections. Michael likens the anticipation of the Fed’s decision to a dinner menu, questioning whether the outcome will be a “filet” or a “hamburger” in terms of the Fed’s approach to future rate cuts. They emphasize the importance of Chair Powell’s messaging during the press conference, particularly regarding the Fed’s cautious and data-dependent stance.

The conversation also touches on the volatility in the markets leading up to this pivotal moment, considering how various asset classes may react post-announcement. With options expiration and quarterly index rebalances approaching, they discuss the potential for a “sell the news” response if Powell’s comments do not align with market expectations. Michael highlights the current buyback blackout window for many companies, which could further influence market dynamics.