{"id":20216,"date":"2024-09-23T20:32:48","date_gmt":"2024-09-23T20:32:48","guid":{"rendered":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/?p=20216"},"modified":"2024-09-23T20:32:48","modified_gmt":"2024-09-23T20:32:48","slug":"what-to-watch-for-after-a-fed-rate-cut-market-reactions-opportunities-and-risks","status":"publish","type":"post","link":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/what-to-watch-for-after-a-fed-rate-cut-market-reactions-opportunities-and-risks\/","title":{"rendered":"What to Watch for After a Fed Rate Cut: Market Reactions, Opportunities, and Risks"},"content":{"rendered":"Get Real Time updates and more by joining our Private Facebook Group<\/a>!\r\n\r\n\r\n\r\nSubscribe to our\u00a0YouTube Channel<\/a>\r\n\r\n\r\n\r\nListen to our Market Recap Podcasts on Apple Podcasts<\/a>\r\n\r\n\r\n\r\n
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What to look out for after a FED rate cut<\/h3>\r\nSeptember 23, 2024 by\u00a0GalTrades.com<\/a>\r\n\r\nPowel said at the Jackson hole meeting, \u201cThe time has come for policy to adjust,\u201d The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.\u201d\r\n\r\nIt didn’t matter if we got a .25 or .50 basis point rate cut,\u00a0earnings growth will determine if the market can keep going up.\r\n\r\nThe market made new all-time highs, but only one MAG7 stock made new all-time high, META. That means the rally is broadening, a positive point for the market.\r\n\r\nThe S&P is currently trading at a forward P\/E of 21 which suggests that a lot has been priced regarding the bull thesis. Valuations are high and that should be noted. How much higher can the market go up? remains to be seen.\r\n\r\n“don’t fight the Fed” or “don’t fight the trend” are statements to sustain near-term bullish momentum. Aside from the FED cutting rates, the economy still appears to be on firm footing.\r\n\r\nNext week the earnings and economic calendar is relatively light, outside of next Friday’s PCE report, but perhaps this can be conducive for recent bullish momentum. In the absence of news, the path of least resistance is higher. Yes, we are still in the midst of bearish seasonality, but the technicals look encouraging.\r\n\r\nGoing forward bad news is good news because the FED will need to lower rates on bad news, unless the news is disastrous.\r\n\r\nAs long as the SPX can remain above July’s prior all-time closing high 5,667, we should see continuation. An SPX close below 5,667 could introduce concerns of a false breakout to all-time highs, which would likely introduce some additional selling pressure\r\n\r\nA positive point: 76% of the S&P 500 stocks are above there 50 Day Moving Averages and 76% are above their 200 Day MA.\r\n\r\nYear to date the two top performing factors were momentum and growth which were up 29\/27 % respectively. The two worst preforming groups were yield and value stocks. In the last 3 month that flipped. Dividend and value stocks get an uptick when rates come down.\r\n\r\nI see analysts calling for the small caps to go up with rate cuts. The action on Wednesday didn\u2019t show that. It may be wise to react as opposed to jumping in now. It would make more sense for mid-caps to go up prior to small caps as there are more profitable companies in mid-cap sectors.\r\n\r\nStatistics show post-election the markets usually end higher. And in the past when the FED has cut rates in a soft landing, or no landing markets ended up higher for the next 6 to 12 months almost 100% of the time.\r\n\r\nCyclical, mortgage, auto loan rates and small cap stand to benefit from rate cuts.\r\n\r\nRate cuts can ignite small caps and value stocks. The IJR index contains a higher % of companies which are profitable as opposed to the IWM Russell 2000.\r\n\r\nBull market indicators usually benefit capital market plays, stocks such as; CBOE, IBKR, BLK, GS. Rate cuts should help the homebuilders XHB ETF.\r\n\r\nIf Fed rate cuts can bring short-end bond yields down to more normal rates, then banks wouldn\u2019t have to overcompensate at the long end and longer-term loans like mortgages could come down. That would put more money in the pockets of everyday Americans and help fuel all sectors of the stock market \u2014 not to mention the benefit lower rates have on valuations.\r\n\r\nCommodities and oil prices are down, rates are coming down. That\u2019s all good for companies and the consumer.\r\n\r\n \r\n\r\nEnergy companies as opposed to the price of oil. historically this sector has been one of\u00a0the best sectors going into a rate cut. What we didn\u2019t have in the past is a slowdown in China, that narrative should put a lid on appreciation. There may be some individual names that are exceptions.\r\n\r\nFINISH ARTICLE HERE<\/a>\r\n\r\n\r\n
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Daily Levels for September 23, 2024<\/h3>\r\n\r\n
\"\"<\/figure>\r\n\r\n\r\n \r\n\r\n\r\n\r\nEconomic Reports<\/strong>\r\n\r\n\r\n\r\nprovided by:\u00a0<\/a>ForexFactory.com<\/a>\r\n\r\n\r\n\r\nAll times are Eastern Time ( New York)\r\n\r\n\r\n
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Improve Your Trading Skills<\/h2>\r\n\r\n\r\nGet access to proprietary indicators and trading methods,\u00a0consult with an experienced broker<\/a> at 1-800-454-9572.\r\n\r\n\r\n\r\nExplore trading methods.\u00a0Register Here<\/a>\r\n\r\n\r\n
\"\"<\/a><\/figure>\r\n\r\n\r\n* This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc<\/a>. Any statement of facts\u00a0here in\u00a0contained are derived from sources believed to be\u00a0reliable,\u00a0but are not guaranteed as to\u00a0accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own\u00a0judgement\u00a0in trading.<\/em><\/strong>","protected":false},"excerpt":{"rendered":"

Get Real Time updates and more by joining our Private Facebook Group! Subscribe to our\u00a0YouTube Channel Listen to our Market Recap Podcasts on Apple Podcasts What to look out for after a FED rate cut September 23, 2024 by\u00a0GalTrades.com Powel said at the Jackson hole meeting, \u201cThe time has come for policy to adjust,\u201d The […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[231,76,230,67,30,61,234,1],"tags":[],"class_list":["post-20216","post","type-post","status-publish","format-standard","hentry","category-commodity-brokers-2","category-commodity-trading-2","category-day-trading-2","category-future-trading-news","category-futures-broker-2","category-futures-trading-2","category-trading-guide","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts\/20216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/comments?post=20216"}],"version-history":[{"count":1,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts\/20216\/revisions"}],"predecessor-version":[{"id":20219,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts\/20216\/revisions\/20219"}],"wp:attachment":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/media?parent=20216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/categories?post=20216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/tags?post=20216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}