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.
This is one example of a very specific idiosyncratic company that this analyst at least thinks will not be benefiting from those tariff policies. It shares are also under pressure after a downgrade at loop capital based purely on valuation after the stocks recent run to all time highs our very own. Now remember reddit price its IPO and back in March at $34 per share when it went public on its first day of trading, it reached a peak of $57 per share.All right, thanks so much for breaking that down for us.They did come and flop, but that was better than anticipated.That's next retail sales coming in flat this month, which is better than expected.
So what do you think is the biggest driver though, of the moves that we're seeing on the long end of the curve? Uh, if the fed doesn't cut in September, then I think you can kind of bounce around, you know, in the range that we've been in and listen, we've been living very much in a range for the last, you know, four or five months, uh, on the 10 year, you know, I think that's going to be between 4% and, you know, four and three quarters percent and, and the, and the daily data is going to move that on the margins for sure.
And so I think there's an under appreciation for the risks that inflation, um you know, maybe doesn't trend towards 2% quite as quickly as the market seems to think it will.And so, you know, when I think about, you know, regardless of the political environment, either, either candidate, how they end up in office, I think the risks are to higher inflation rather than low inflation.So both candidates are inflationary.
But let's talk about the reaction that we're seeing play out in Charles Schwab because that's a top trending ticket here in Yahoo Finance today. And Christopher going back to you here, I do want to focus on how some potential policies coming from potential White House attendees come.Uh taking a look at Kre, as I mentioned earlier, it's up a whopping 13% over the past five days and certainly up on the moving to the upside this morning here, JD Vance, obviously speaking with and working with Elizabeth Warren in the past.
But certainly I think the attitude is that the small and mid size banks should have a different playing field. Now as we head into the thick of earning season, which names are best positioned to overcome some of that weakness.Thanks so much for joining us here, John. They've added $5 billion in revenue since 2019, between two companies leaning and a NSA Nike's revenue is down over a billion dollars during that time period.
There's a lot of capital controls that our Washington Research Group uh has written and talked about quite a bit and retaliation from Beijing and Chinese consumers could be significant. What do you think the potential is for Lulu Lemon to be able to emerge as the retailer that found a way to win in China when you've got Nike Adidas Estee Lauder struggling because of pressures in the mainland.
John, when it comes to brands trying to figure out how to succeed in China, I I guess what are the biggest differences just in terms of brands that are resonating with Chinese consumers?What are some of the key differences that that you're noticing when it comes to success in in the Chinese market versus what retailers are doing?I'm sure the Chinese consumer obviously has different preferences uh and styles in us consumers.