Rate Cuts are coming

Weekly roadmap for 09/15-09/21

Hello Everyone,

I hope you had a great weekend! Apologies for the slight delay in getting this out. This week is a big one as we head into the FOMC decision, but before we dive into that, let’s look back at last week’s performance.

The market experienced a strong rally, with major indices climbing higher. The S&P 500 is now sitting just below its previous all-time highs, while the NASDAQ (Q’s) took the lead, largely driven by a surge in semiconductor stocks. This was fueled by Nvidia’s conference, where CEO Jensen Huang reaffirmed that demand for chips remains robust, providing a boost to the broader AI trade.

Economic Data to Watch This Week

This week kicks off with retail sales data, which remains critical as every piece of economic news is now scrutinized closely due to resurfacing concerns about growth. The week’s main event is the FOMC meeting on Wednesday. Markets remain divided on whether we’ll see a 25 basis point (bps) or 50 bps cut, with strong arguments on both sides. We’ll wrap up the week with jobless claims data, along with several smaller economic reports in between.

SPX/SPY Outlook

With the FOMC meeting now upon us, market sentiment is split on whether we’ll see a 25 bps or 50 bps rate cut. Retail sales on Tuesday will be key in shaping the ongoing narrative around growth versus recession fears. Depending on the results, it could either reinforce last week’s fading recession concerns or reignite them. The Wednesday FOMC decision is where the real market action will occur.