Fed Rate Cut on top of a downward falling graph, macro closeup view. Concept on FOMC adjusting rates to address inflation and the .
The Tech Laden NASDAQ finished the week again at record levels achieving its 25th record high of the year while the S&P 500 fell slightly with the Dow Jones back tracking 274 points after cresting 46,000, then settling back. The strong positive feelings on the street that the Fed would institute a rate cut have all but materialized. Also, strong interest in the Artificial Intelligence sector has buoyed the markets, opening a vast area of interest. The release of the University of Michigan’s Consumer Sentiment Survey, released this week revealed a dramatic 4 month low of consumer confidence. It clearly paints a worrisome picture of the American Consumer and the state of economic affairs of this country. The Federal Reserve’s Jeerome Powell will officially announce on Wednesday the determination. “Investrors are in a wait-and-see mode,” said Chris Kampitsis, managing partner at Barnum Financial Group. “Barring significant geopolitical and macroeconomic events, this is where stocks will be until we get that interest rate announcement.” Gold, has and is a strong investment vehicle as investors have flocked to the precious metal, running the price to record highs, currently trading at $3,72.80 a troy ounce. The 10-year Treasury yield edged a bit higher as closing the week at 4.058%.
Strokes drifted higher Monday as the market, in anticipation of Wednesday’s rate announcement, floundered, then edged higher. Secretary of State Scott Bessent’s proclaiming that “high level discussions with China” have produced “the framework” of a deal regarding TikTok ownership, a long discussed issue, until now one that both parties were far apart on. Both sides appeared optimistic, and ready to finally ‘put the project to bed.’ Mr. Bessent was quoted that the ‘framework could switch to the U.S.-controlled ownership as a strong possibility. Stocks back-tracted Tuesday with the Dow Jones Industrial Average falling 126 points while both the S&P 500 and Nasdaq ended 6 day win streaks. Texas crude hovered near $64.00 a barrel, with Brent crude futures trading near $68.00 a barrel. An economic bright spot, retail sales picked up 6% in August, showing a stronger retail consumer than expected. Gold added another record day, closing at $3,688.80 a troy ounce, with the ‘shiny mental’ continuing its strong pace.
As expected, the Fed cut the interest rate by a quarter point Wednesday with the governors indicating another 2 cuts are possible before year’s end. The Job market and inflation were major factors weighing on the board. A lone dissenter on the board, Stephen Miran, recently appointed by President Trump, was in favor of a bigger half point cut.
Cattle Ranchers and Surging beef prices are….”Back in Style.” Ground Beef to Steaks, demand is at a 30 year peek. Five years ago a rancher was profiting $2 to $5 per animal profit (Steers, Cattle), according to industry data; today ranchers are profiting $500 to $700 per animal. Some estimates for 2026 are reaching $800 to $900 profit per animal. Ground beef prices have risen steadily for over 24 months, hitting all time highs this past August, with a 13% increase this year. Nebraska, the 2nd leading ‘beef-state’ is seeing mid-size ranchers report 5 to 10 times earnings increases. Shaun Loughery, a 50 year old 6th generation family rancher in Nebraska said, ”We can make just as much money with less cattle, better genetics than we can with having a s – – -load of cows running around.” Mr. Loughery is raising 1,000 head of cattle on 20,000 acres, family owned since 1889.
RUMBLINGS ON THE STREET
Ken Griffin, CEO of Citadel, Barron’s – “There is one salient issue in the equity market now: How much of the hype of AI will translate into the reality of a more productive, more prosperous future?”
Dan Ives, an analyst at Wedbush Securities. WSJ – “Developments in U.S–China negotiations gave the green light to investors looking for any positive signs going into a week where the Fed almost surely cuts interest rates.
Liz Ann Sonders, chief investment strategist at Charles Schwab, WSJ – “The market continues to power ahead, seemingly oblivious to things that should be of concern, like the slowdown in job growth.”
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