September 26th Market Overview

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Happy Thursday, everyone.

I’m ecstatic on how well the market is reacting to the large rate cuts.

We had a small consolidation of price action into more forward momentum. To me this signals a healthy outlook and the market trusting the feds decisions overall.

A personal ask from me - each time someone checks out today’s sponsor it buys me a sip of coffee. I promise to keep this brief free and rolling every market session!

Lets dig in…

Executive Summary

• S&P 500 ▲ 0.3% to 5,745.41, setting fresh record high on decent economic data

• Micron Technology ($MU) ▲ 17% on strong earnings and AI-driven demand

• Southwest Airlines ($LUV) ▲ 7% following profit-boosting strategy reveal

• Weekly jobless claims more than expected, signaling labor market strength

Market Overview

S&P 500 ▲ 0.3% to 5,745.41

Nasdaq Composite ▲ 0.5%

Dow Jones Industrial Average ▲ 274 points (0.6%)

Key Market Drivers

1. Tech Sector Strength: Semiconductor stocks lead gains, with Micron’s stellar performance catalyzing sector-wide optimism.

2. Economic Resilience:

   • Weekly jobless claims ▼ to 218,000, better than expected

   • Durable goods orders unchanged vs. anticipated decline

   • Q2 GDP unrevised at robust 3% growth rate

3. Airline Industry Boost: Southwest’s profit-enhancement plans lift the sector, complemented by falling oil prices.

4. China Stimulus: Officials’ affirmation of economic support measures boosts Chinese stocks and global sentiment.

Stock Spotlight

1. $MU ▲ 17%: is up on excellent quarterly results and strong future guidance, marking its best performance since 2011. AI-driven demand fuels optimism.

2. $LUV ▲ 7%: Jumped after unveiling a three-year strategy to boost earnings by $4 billion by 2027, including plans for assigned seating and extra-legroom options.

3. $AMAT ▲ 4% and $LRCX ▲ 5%: Gained alongside Micron, reflecting broader strength in semiconductor-related stocks.

4. $SMCI ▼ 12%: Plummeted amid reports of a Justice Department probe into accounting practices.

5. $FXI, $MCHI ▲ 6%+: Chinese stock ETFs rallied on renewed stimulus hopes.

Magnificent 7 Watch

• $NVDA ▲ 2%: Shares rose, pushing market cap past $3 trillion, despite valuation concerns.

• NYU’s Aswath Damodaran warns of “worst” investing odds among Magnificent 7 for Nvidia.

• Performance anxiety about lofty valuations could shift investor focus within the group.

Other Notable Company News

• $SBUX ▲ 2%+: Bernstein upgraded to outperform, applauding new CEO Brian Niccol.

• $NYCB ▲ 4%+: Barclays upgraded to overweight, seeing promise post-repositioning.

• $BTC: Tests $65,000 level following positive U.S. economic data.

• OpenAI: Considering for-profit restructuring amid departure of CTO and top researchers.

Sector Watch

Bond Market

The yield on the 10-year Treasury note is holding steady.

Policy Watch

• David Tepper advocates for 2-3 more Fed rate cuts to maintain credibility.

• Biden announces $8 billion in military aid for Ukraine.

• Trump’s trade proposals could potentially stoke inflation, according to Piper Sandler analysis.

• Wells Fargo Investment Institute projects 200+ basis points of Fed rate cuts by end of 2025.

• Current economic data trends positive, alleviating fears of aggressive Fed rate cuts.

What I’m Watching

1. AI Impact: Monitor sector-wide effects as companies like OpenAI restructure and investors emphasize AI’s importance.

2. Consumer Behavior: Watch for early holiday season spending indicators amid mixed economic signals.

3. Geopolitical Ripples: Assess market impacts of global tensions, including the Ukraine situation.

4. Regulatory Landscape: Stay alert to potential tech sector scrutiny following the SMCI probe.

5. Energy Dynamics: Track how oil price fluctuations affect various sectors, particularly airlines and transportation.

P.S. 
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Thank you for reading,

- JB

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Note: This newsletter is intended for informational purposes only.