If you are listening to CNBC or Bloomberg (as I have recently), you would think there is going to be a recession because the market has stalled since the Federal Reserve cut rates last week. This is NORMAL for now. But the institutions simply are sitting on the sidelines, repositioning their portfolios until after the election or there looks to be a clear winner. That’s it. I mentioned previously that we may get several days (up to 10) of the continued rally after the Federal Reserve announcement, which would be precipitated by computer buying that has happened. (True buying was absent, and so was selling; that is why the market stayed its current course.) I don’t expect that to happen again until after the election. The path forward of the market in the short term is lower. I saw a stock on my buy list dropping yesterday. So I bought it. Not sure how far this market will fall in the short term but we have entered a time to buy on pullbacks, as I don’t think there are any powerful rallies in store for this market before a clear winner is crowned for the election.
I have mentioned it numerous times. I expect a powerful rally into the end of the year! (post-election, or a clear winner) Remember I said that.
As for the talking heads. There is nothing to believe there is a recession. As of September 17th, the Atlantic Federal Fed GDP Now growth model predicts growth at 3%. That is a great number and anything more than 2% is good.
If a recession were to take hold, it would most likely begin to rear its ugly head in the first or second quarter of 2025. (I’ve had that numerous times). The Fed’s aggressive rate cut, and if he continues to be aggressive into the end of 2024 like he and many other Fed officials have indicated, decrease the chances of recession rearing its head next year. I think he cut 50 basis points because he sees he should have cut the month before, like myself and many other respected voices were saying.
All the indexes we talk about are trending near their trading highs. They are taking a well-deserved breather. What most do not realize is that the NASDAQ and Small Cap Russell 2000 have not set a new high since July. While the S&P 500 squeaked a tad higher on lower volume. I expect the large indexes to market perform year-end and 2025 as repositioning continues. I expect the action to be in the small and midcap stocks. Remember I said that! I will start covering mid-caps in future posts.
So don’t worry! Be Happy! And don’t listen to the noise! (talking heads on TV)
Upstart
Upstart had a great day yesterday! The volume was heavy! The best, in my opinion, has yet to come. I feel strongly they will blow away current projections, raise guidance into year-end, and raise fiscal 2025 projections based on the current macro environment. If the Federal Reserve continues its stated path of continued rate cuts, the macro environment will continue to be extremely bright.