Money & Markets Daily: The 5
Keeping up with everything going on in financial markets and the economy is tough these days. That’s where “The 5” from Money & Markets Daily comes in…
Let’s start your week off right!
T-Minus 48 Hours to Rate Cuts…
On March 17, 2022, the Federal Open Market Committee (FOMC) voted to raise its target fund rate by 25 basis points from 0.25% to 0.50%.
It started a spree of 11 separate rate hikes from March 2022 to July 2023 in an effort to tamp down the worst bout of rising inflation since the Carter and Reagan administrations.
For the first time in more than two years, the FOMC is widely expected to cut rates this week as part of its September meeting on Wednesday.
The biggest question on the minds of investors is: How much will the Fed cut rates?
According to CME Group’s FedWatch tool, rate futures are split between a 25-basis-point cut (51%) and a 50-point reduction (49%)… surprising since only 28% of futures tied to 30-day Fed Funds were trading with a 50-point cut earlier last week.
The August Consumer Price Index (CPI) report — the inflation gauge used by the Fed was in line with expectations, shifting the concern to the U.S. job market, which has started to slow.
The increase in projections for a 50-point trimming suggests investors are betting the Fed wants to prevent further deterioration in the job market.
Nothing will be certain until the FOMC meeting begins on Tuesday.
Will the Fed Trigger a “Sea Change” for Global Markets?
While the Fed will be front-and-center in the U.S., it’s not the only central bank holding policy meetings this week.
Banco Central in Brazil, the Bank of England, South Africa’s Reserve Bank, Norges Bank in Norway and the Bank of Japan will all hold meetings over the next five days.
Brazil’s central bank will open its meeting on Tuesday, while the U.K., Norway and South Africa will hold their policy meetings on Thursday. The week wraps with the Bank of Japan on Friday.
Surveys suggest a mixed bag of rate decisions in those countries.
Brazil is widely expected to increase its rate by 25 basis points to 10.75%, and the Bank of England is expected to hold its rates steady at 5%.
For the first time in almost four years, South Africa’s Reserve Bank is expected to cut its interest rates. Norges Bank in Norway maintained its 4.5% rate in August and said it would maintain that level “for some time ahead.”
The Bank of Japan will not likely make any hikes during this meeting, but economists do expect the bank to increase the bank’s rates by the end of the year.
For more on how this global shift in interest rates might affect YOUR portfolio, check out the replay of Adam’s latest live presentation HERE.
Reviving the American Dream
Housing stocks have suffered in recent years due to high interest rates, supply chain shortages, and astronomical prices for building materials like lumber.
But over the last year, housing stocks have staged a comeback for the first time in over 15 years:
This is great news for the American housing crisis and great news for investors. After all, if these businesses did well selling their finished homes for a quarter-million dollars a few years back, then they should do even better selling homes for half a million (or more in some communities).
Selena Gomez Joins the “Pop Star Billionaire” Club
If you’re over thirty years old, then there’s a good chance you’ve only heard of Selena Gomez in passing…
First appearing on the scene next to the big purple dinosaur in “Barney & Friends,” Gomez has been a fixture of the pop music scene for years now, growing up alongside her millions of adoring fans through numerous gold records and hit singles.
But it was Gomez’ “Rare” beauty line that pushed her net worth across the ten-digit mark. Like so many of today’s other celebrities (including Kylie Jenner, Logan Paul, and Hailey Bieber), Gomez has directly monetized her ravenous fanbase — instead of simply signing a sponsorship deal like celebs have always done in the past.
The Votes Are In…
With election season ramping up in the U.S., we wanted to know if you’re changing the way you invest.
And going by last week’s poll, the vast majority of you are sticking to your game plan.
Is November’s Election Changing the Way You Invest?
In our latest poll, we received over 100 votes, and almost three-quarters of you stated you aren’t changing your strategy.
It’s great to see that a substantial majority of our audience is confident in their approach heading into November. Our goal at Money & Markets is to cut through all the noise and find opportunities that you can have confidence in.
And keep an eye on Money & Markets Daily. You may not be changing the way you invest heading into a contentious election, but certain market segments are set to benefit depending on who has control in Washington. Even better, certain sectors should outperform — no matter who wins!
— Money & Markets Team