September 23rd Market Overview

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Happy Monday, everyone.

A strong consolidation day ending a bit in the green.

This is healthy price action and is slowly solidifying that the market did in fact like the feds decision last week on the rate cut. It’s still too early for me to say that with certainty…. but I like what I see!

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Lets dig in…

Executive Summary

• S&P 500 ▲ 0.29% to fresh record close, extending post-Fed rate cut rally

• Manufacturing PMI hits 15-month low at 47.0, signaling economic slowdown

• $INTC surges on potential $5B Apollo Global investment

• Historical trends suggest strong Q4 performance for S&P 500

Market Overview

We’re seeing continued momentum following last week’s Federal Reserve 50 basis point rate cut. The S&P 500 added 0.29%, while the Nasdaq Composite ticked up 0.18%. The Dow Jones Industrial Average gained 67 points, or 0.16%, closing above 42,000 for the first time.

Key Market Drivers

1. Federal Reserve’s 50 basis point rate cut sparking equity rally

2. Weak manufacturing PMI data (47.0, lowest since June 2023)

3. Ongoing AI-driven demand boosting tech sector

4. Upcoming jobless claims data on Thursday

Stock Spotlight

1. $INTC ▲ 4%: Potential $5 billion investment from Apollo Global Management

2. $MU ▲ 2.7%: JPMorgan reiterates overweight rating ahead of Wednesday’s earnings

3. $TSLA ▲ 4.8%: Barclays sees potential for better-than-expected Q3 deliveries

4. $AVAV ▲ 8%: U.S. Army lifted stop work order on $990 million contract

5. $PINS ▲ 2%: Deutsche Bank initiates coverage with a buy rating

Magnificent 7 Updates

• $NFLX, $AAPL, and $AMZN trending slightly downward amid mixed market sentiment

• Other Magnificent 7 stocks showing no significant movement

Other Notable Company News

• $CIEN ▲ 4%: Citigroup double upgrade, citing improving telecom/cable industry landscape

Sector Watch

Bond Market

The 2-year Treasury yield edged up slightly to 3.58%, reflecting market expectations for future rate cuts. Strategas technical strategist Chris Verrone notes that a move below the pre-FOMC low of 3.50% could indicate the bond market’s dissatisfaction with the Fed’s current stance.

Policy Watch

Chicago Fed President Austan Goolsbee anticipates “many more rate cuts” ahead, focusing on balancing inflation control with employment risks. Atlanta Fed President Raphael Bostic supported the recent half-point cut and sees potential for quicker policy normalization, citing faster-than-expected progress on inflation and labor market cooling.

What to Watch

1. Weekly jobless claims data on Thursday

2. $MU earnings report on Wednesday after market close

3. Further Fed commentary on rate cut trajectory

4. Potential geopolitical tensions and their impact on market volatility

Historical data suggests the S&P 500’s rise to all-time highs in September could indicate strong Q4 performance, with a 90% positivity rate and an average gain of nearly 5%. In election years, this trend is even more pronounced, with a 100% positivity rate and average gains of nearly 6% in Q4.

P.S. 
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- JB

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Note: This newsletter is intended for informational purposes only.