“I think Powell is going to show his cards in regards to how many rate cuts.” – 01:49
Eddie Ghabour, Key Advisors Wealth Management, joins Remy Blaire at the New York Stock Exchange to explore the current state of the stock market and the implications of the Federal Reserve’s upcoming rate announcement.
Remy opens the conversation by highlighting the prevailing optimism on Wall Street, where investors are betting on an economic recovery fueled by tax cuts and anticipated rate cuts from the Federal Reserve. Despite concerns over weak job numbers and tariffs, the markets are experiencing a surge, particularly in the tech sector, with some meme stocks also making a comeback. Eddie emphasizes that while some analysts argue that valuations are overextended, he believes that in a bull market, valuations can rise significantly higher.
As the segment progresses, Remy and Eddie discuss the significance of Fed Day, with the rate announcement expected the following day. Eddie shares his insights on the key terms and signals he is monitoring, noting that the market is fully pricing in three rate cuts for the year. He warns that any indication of a more hawkish stance from Fed Chair Jerome Powell could lead to a market pullback. However, Eddie remains bullish, suggesting that any dips should be viewed as buying opportunities, given the overall trend of loosening monetary policy in a non-recessionary environment.
The conversation shifts to the broader market landscape, where Eddie points out a shift from a tech-heavy portfolio to a more diversified approach. He notes that small-cap stocks and discretionary names have started to perform well, indicating a positive structural change in the market. However, he cautions that the biggest risk lies in unexpected movements in interest rates, which could adversely affect small-cap stocks.