Stocks roar to life after Fed cut, biotech names: Market Domination

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Julie Hyman Nyheter

Market Domination,Senior Managing Director,Interest Rate Cut

It's the final trading hour of Thursday, and seemingly nothing can keep stocks from moving higher today. Market Domination hosts Julie Hyman and Josh Lipton ...

It's the final trading hour of Thursday, and seemingly nothing can keep stocks from moving higher today. Market Domination hostscover the biggest market themes and industry stories as equities soar in response to yesterday's interest rate cut announced by the Federal Reserve.

But we got one hour to go until the market close and we're taking a look at the major averages that are looking to close it records at least two out of the three major averages.Sadly, Josh, but it's been so interesting to see really the fed reaction today.Because yesterday I was here, I will tell you as we were kind of waiting for the news and it dropped and I was surprised, I think along with other people, I did think they were gonna go 25.

We're gonna talk more about that in just a moment but because we are seeing yields move higher, we've got this weird also trade where interest rate sensitive stocks are not doing as well, real estate down a little bit utilities down a bit consumer staples.That's what I'm trying to say for more on the markets record run.

Um And when you think about it within the context of the fact that we've had 525 basis points worth of tightening since March of 2022 I think the Fed wanted to send a message that it is cognizant of the risks particularly in a volatile election year. So, one of the incredible things, and I think part of why the market hesitated at first yesterday in response to 50 is it just a sense of confusion because basically for the most part, uh, certainly going back to last week, although the odds skewed up, uh, a little bit more, uh, coming into yesterday afternoon, it was pretty much a coin flip, whether they were gonna do 25 or 50 and the market needed to process this message that in fact, no, the fed doesn't know anything that we know or...

Uh And in fact, inflation, uh we've had, you know, an extremely beneficial fall in the price of oil and gasoline, but that's now behind us. And so from that perspective, when we think about the cost of capital companies that understand how to deploy generative A I will all else sequel have their cost of capital diminish over time and and more broadly as well, Julian, as we think about returning to sort of easier money policy.

Also says that they also went on to the current rate backdrop, key positives for the retailer as well, you know, and target sort of been trying to turn itself around.Uh the stock is up about 10% year to date.And you can really see perhaps some of the challenges that are ahead for Target and ahead for uh this new executive and the rest of the team sticking with retail here, shares of sketchers are sinking today.

Sure, finally here moving on to mobilize those shares surging after Intel says it is not currently preparing to sell its majority stake and that is the news Intel says that the current not currently preparing Julie to sell that stake. The problem is if they sold it, they would likely have to sell at a loss because Intel bought Mobile in 2017 for about $15 billion and the stock going into today was worth about $11 billion.I mean, last month they cut the forecast, the stock hit new lows.All right, with the fed lowering rates yesterday, we're starting to see a ripple effect in the tech trade with more tech spending and larger venture capital investments potentially on the horizon.

And I think you see investors trying to position themselves to, to capture some of that, especially when money is easier to get come by. So I guess the question is, how much further do we go to have to see really the floodgates open in a more decided fashion? I mean, I've been out there for a long time, um, having come from this very neighborhood, you know, there's a Wegmans in this bill is what's, that's amazing.But anyway, um the uh the changes in this neighborhood, the changes in the Bay area are so uh interesting right now because there are a lot of start ups, there are a lot of uh semiconductor start ups getting funding uh that there have been over a dozen new semiconductor projects announced in the last two months.

Powell indicating the right decision should be taken as a sign of the central bank's commitment not to get behind the curve here to weigh in former Federal Reserve Bank of Boston president, Eric Rosengren Eric, thank you so much for being here.

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