Headline News:
Equity futures point to a mostly higher open after yesterday’s mega-cap-led action saw the Nasdaq Composite and S&P 500 secure new all-time intraday and closing highs, with the S&P 500 closing above the 6,600 mark for the first time.
The September FOMC meeting kicks off this morning, bringing several notable developments to recent headlines.
A federal appeals court has determined that Fed Governor Lisa Cook cannot be fired before the meeting, upholding a lower court ruling that prevented her firing as the lawsuit plays out, according to CNBC.
Ms. Cook will therefore be voting in this week’s meeting, as will Stephen Miran, whose nomination as a Fed Governor was confirmed by the Senate yesterday evening. The Wall Street Journal reports that Mr. Miran will retain his current role as Chairman of the Council of Economic Advisers, taking unpaid leave while fulfilling his duties as a Fed Governor.
Treasury Secretary Scott Bessent noted in a CNBC interview this morning that the current plan is for Mr. Miran to return to his White House role when his term as Fed Governor expires in January, at which time another person will be appointed.
(Michael Gibbs, Managing Director, Lead Portfolio Manager )
Markets:
The S&P 500 rallied to another record high, closing at 6,615.28, and continues to trade along the upper Bollinger Band. Despite the strength in price action, the RSI has not yet confirmed the rally, as it remains below the overbought threshold of 70. This divergence leaves some uncertainty about the sustainability of the move.
We view the recent breakout as the potential start of a new uptrend, but risks remain elevated ahead of Wednesday’s Fed decision. Market participants appear to be pricing in a 50-basis-point rate cut, and if the Fed delivers less, profit-taking and selling pressure could quickly emerge, reversing part of the recent gains.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
Partner, DJWMG
Windsor Wealth Planners & Strategists
Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
The percentage of stocks trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving averages are used for short-to-medium-term timeframes, while the 150-day and 200-day moving averages are used for medium-to-long-term ones. Signals can be derived from overbought/oversold levels, crosses above/below 50%, and bullish/bearish divergences.
The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author, John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions, or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk, and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
This is not a recommendation to buy or sell any company’s stock mentioned above.
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The Nasdaq 100 (^NDX) is a stock market index made up of 103 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. It is based on exchange and not an index of U.S.-based companies.
The Russell 2000 Index is a stock market index that measures the performance of the 2,000 smaller companies included in the Russell 3000 Index. It is managed by London’s FTSE Russell Group and is widely regarded as a bellwether of the U.S. economy because it focuses on smaller companies that focus on the U.S. market.