break down some of the biggest stories driving market action, from the possibility of a September interest rate cut to the latest bank earnings.outside of the Magnificent Seven:"I think you're going to see some catch-up. Valuations just are compelling in certain areas and I think that's going to play out over the next month or two before we get to the Fed rate cut. Remember, September is the end of the fiscal year for the federal government.
We've got more on that coming up and former president Trump taking his running mate, Senator JD Vance will take into his record on business and the economy and how that could impact the broader Trump campaign, right? We're supposed to see the earnings recession end for the 493 which takes out our mag seven, the big tech companies that's supposed to end, we're supposed to see earnings grow for the first time in about six quarters for the 493 right now in this reporting period.And then from this quarter on, you're supposed to see earnings continue to pick up for that 493.
And so it seems like the pause is probably more on the Russell 2000 than it is on the sector action that we've seen within the S and P 500. And so if it does scale back, what does that do to kind of the rally that we've seen and will people step back out, I think is perhaps maybe the most interesting part of this.
So we were just talking about this idea that the 493 the forgotten 493 are finally having their moment to shine do you see that becoming a reality this earnings cycle?So you're going to see a slowing in the economy and some, the stock market in general is going to struggle with that.Number one, number two, the fed is expected to cut rates.Still, it still has not hit that 2nd and 3rd leg of this.
And again, I would I hate to sound a broken record but those fourth underlying themes continue to push growth, growth and inflows of capital into the US upward, which is good for equities. Remember, it's not just about the headline data, it's about what's happening underneath the data and we're seeing pockets of weak in some of the consumer areas, right?That's pretty good.
Already beginning to weigh in with Cowan analyst, John Miller predicting that the VP nominee going to focus his campaigning on industrial policy and anti trade, anti China trade proposals here to discuss this.We're just talking about with Jose Roscoe here in our last segment.
If Trump is reel elected to the White House, JD Vance will be at the table, I would assume, but certainly it will be President Trump deciding what policy is, Kim.There's a report out from Wall Street Journal saying that he's going to donate to a pro Trump campaign or a PAC that's helping to get Trump re elected here $45 million per month in donations.
I would say that in the N Pr PBS news Marist poll from Friday, I was struck by the fact the gap between people earning $50,000 or less 24% saying they're going to vote versus those earning more than that mark. I guess Kim to be more specific, for example, yesterday, we had Biden talking about proposing capping national rent increases at 5%.
And more importantly, the Democratic base up and down the ticket in the various states and districts and among donors, that's the first challenge for Democrats is to find a way to reverse the momentum that former President Trump has enjoyed nearly all of the last three weeks.All right, Kim Wall is 22 V research senior managing director.You've got the Dow and the S and B holding on to gains right now.
Of course, the fundamentals of the company with the robot tax, the announcement, Shana and then Ceo Elon Musk's political moves as well adding to the broader Tesla picture here. On the flip side, we have heard some others be a bit more cautious just in terms of maybe the pressure that we could see almost across the board and not just Tesla but really across the board when it comes to EV makers or automakers that have made a bigger push into EVs including those traditional automakers legacy automakers that they could come under a bit of pressure.
Let's take a look at Dollar tree getting a bearish call from Piper Sandler, the firm downgrading the stock to neutral from overweight slashing the price target on the on the stock to 100 and 12 bucks a share saying that the company is quote uniquely disadvantaged regardless of the outcome of the presidential election.