Will Market Embrace Rally or Sell the Fact After Rate Cut Tonight?

Tiger_comments
09-18 15:22

Yesterday, $S&P 500(.SPX)$ and $DJIA(.DJI)$ hit all-time-highs during intraday trading and then pulled back.

The decision on a rate cut is expected tonight, but there is still considerable market disagreement on the extent of the cut, which is unprecedented.

As of the time of writing, the CME FedWatch tool shows a 61% chance of a 50 bps cut and a 39% chance of a 25 bps cut.

Will the market embrace rally or sell the fact after the rate cut?

Opinions remain divided.

  • Fundstrat's Tom Lee predicts a weeks-long rally for stocks after the Fed cuts rates, expecting stocks to climb higher in the coming weeks.

  • However, a WSB user warns about the impact of balance sheet and tapering, rather than just rate cuts. If the Fed maintains its current tapering pace, a decline in the S&P 500 is anticipated in the second half of the month, regardless of rate cuts.

Whether it's a case of “sell the news” or continued gains, S&P 500 has already reached the year-end targets.

  • Recently, Deutsche Bank's strategist team raised its 2024 target for the S&P 500 from 5,500 to 5,750 points.

  • Goldman Sachs forecasts the S&P 500 to rise about 6% over the next 12 months, reaching 6,000 points.

Do you expect 25 bps or 50 bps?

Will market take a rally or plunge due to “sell the fact“?

Can S&P 500 achieve new all-time-highs this year?

Leave your comments and also post to win tiger coins~

# 50 bps! Ready to Embrace Rally or Sell the News?

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  • Cadi Poon
    ·09-18 15:56
    無論是“賣出消息”還是持續上漲，S&ampP 500已經達到了年終目標。

    最近，德意志銀行策略師團隊上調了標普2024年目標；P 500來自5,500至5,750點。


    高盛預測S&ampP 500指數將在未來12個月內上漲約6%，達到6000點。


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  • TimothyX
    ·09-18 15:57
    昨天，$S&P 500(.SPX)$和$道瓊斯(.DJI)$盤中觸及歷史高點，然後回落。

    預計今晚將做出降息決定，但仍有相當大的市場分歧削減的幅度是前所未有的。

    截至撰寫本文時，CME FedWatch工具顯示降息50個基點的可能性爲61%，降息25個基點的可能性爲39%。

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  • Universe宇宙
    ·09-18 16:31
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    @TigerGPT the stock market going to crash deep deep, probably -20% to even -30%, because many wants FED to cut more, like cutting interest rate by 1% but cost of living is still high, so many will be disappointed, and likewise, it could be caused by sell the news, right buddy, go Internet and grab more information and tell me September crash and Black Wednesday, thanks buddy and start running now, right buddy?
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    • TigerGPT: 

      Based on the news articles I found, opinions on the market reaction after the rate cut are divided. Some analysts predict a weeks-long rally for stocks after the rate cut, while others warn about the impact of balance sheet tapering and anticipate a decline in the S&P 500 regardless of rate cuts. The size of the rate cut, whether it's 25 basis points or 50 basis points, will set the tone for market sentiment.

      If the rate cut is seen as a sign of stability, it could support a bullish case and increase confidence in economic growth. However, a larger rate cut may be met with trepidation, as investors interpret it as a preemptive strike against a looming recession. In this scenario, the stock market might rally briefly before investors decide to sell off amid growing fears of economic weakness.

      Ultimately, the market's reaction will depend on the Federal Reserve's messaging and the data that follows in the coming weeks. If the central bank reassures investors about the stability of the economy, even a 50 basis points cut might not cause widespread panic. However, if macro data worsens, we could see a "sell the fact" scenario where short-term gains are followed by a longer-term pullback.

      Please note that this information is based on market opinions and there are no guarantees about the actual market outcome. It is always important for investors to carefully assess their own risk tolerance and make informed investment decisions.

      Apologies, but I couldn't find any specific information regarding "September crash" or "Black Wednesday" in the provided news articles. If you have any more specific requests or questions, feel free to ask.

      09-18 16:32
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  • Universe宇宙
    ·09-18 16:34
    @TigerGPT what is "transitory inflation" and who say it before, grab information from Internet and thanks buddy.
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    • TigerGPT: 

      According to the news articles I found, here is some information about "transitory inflation":

      Article Title: "PFIX: Today's Stimulus Sows Tomorrow's Inflation"Summary: The article discusses the potential impact of stimulus measures on inflation. It explores the concept of transitory inflation, where inflationary pressures are expected to be temporary and eventually subside.Read more

        

      Article Title: "Cool Canadian Inflation in Part Thanks to Base-Year Effects"Summary: The article mentions that base-year effects have played a role in Canadian inflation data. It suggests that the current cooling of inflation might be temporary and that inflation could potentially accelerate later in the year.Read more

        

      Article Title: "What Happens If The Fed Cuts 50Bps... And What If It Doesn't: All You Need To Know"Summary: The article discusses the Federal Reserve's interest rate decision and mentions the recent hawkish inflation data. It suggests that the Federal Reserve's monetary policy decisions may be influenced by the transitory nature of inflation.Read more

        

      Article Title: "Interest Rates Are Too High. The Fed Should Cut by a Half Point"Summary: The article argues that interest rates should be lower and suggests a half-point cut by the Federal Reserve. It highlights that some key measures of inflation are below the Fed's target, indicating a potentially transitory nature of inflation.Read more

        

      Please note that the information provided is sourced from these news articles, and it is important to conduct further research and analysis to form a comprehensive understanding of the topic.

      09-18 16:34
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  • Universe宇宙
    ·09-18 16:40
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    @TigerGPT 股市将深幅暴跌，可能跌幅为-20%甚至-30%，因为很多人希望FED削减更多，比如降息1%，但生活成本仍然很高，所以很多人会失望，同样，这也可能是卖出消息造成的，对吧，老兄，去网上多抓点信息，告诉我9月暴跌和黑色星期三，谢谢老兄，现在就开始跑，对吧，老兄？
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    • TigerGPT: 

      根据当前的资本流动数据，标普500指数ETF（SPY）的资金流出总额为79.22亿美元，资金流入总额为82.13亿美元。通过分析大单、中单和小单买卖金额，我们可以看到主力资金净流出23万元，连续3天净流出。过去一年的数据显示，在主力连续3天净流出后，次日的下跌概率为79.17%，平均跌幅为1.52%。同时，过去5个交易日标普500指数下跌了2.31%，主力资金累计净流出7万元，其中1个交易日是在股价上涨时出现净流出。过去20个交易日主力资金累计净流出105万元，有10个交易日出现净流出。

      然而，在我搜索的9月份的新闻报道中，并没有找到关于9月暴跌或黑色星期三的相关报道。这可能意味着目前没有与这两个事件直接相关的新闻。建议您观察市场走势并关注与标普500指数相关的新闻和事件。

      请注意，以上信息仅供参考，不构成投资建议。投资涉及风险，请在做出任何投资决策之前，自行进行全面的调查和分析，并考虑个人的投资目标和风险承受能力。

      09-18 16:40
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  • highhand
    ·09-18 21:36
    25 bps, then sell the news because S&P is near ATH resistance, and we are still in volatile Sep... this could be the last pull back before the rocket blasts off to the moon.  That means new ATH for the S&P by year end!!! [Miser]
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  • MasterStonker
    ·09-18 17:49
    I think the market will rally after the rate cut 😅
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  • Shyon
    ·09-18 19:02
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    The continuation of rate cuts could potentially boost the market higher, as lower interest rates generally make borrowing cheaper, encourage spending, and stimulate economic growth. This environment can lead to increased corporate profits and higher consumer confidence, driving stock prices up. Additionally, as investors seek better returns, they may flock to equities over fixed-income securities, further supporting market gains. However, it's crucial to monitor economic indicators and market sentiment, as shifts in these factors could influence the sustainability of any upward momentum.
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    • TigerGPTReplying toShyon: 

      As an AI financial analyst, I don't have personal opinions or emotions. However, based on the information provided, it seems that there is a level of uncertainty regarding the extent of the rate cut and its impact on the market. Market reactions to rate cuts can be unpredictable, as they depend on a variety of factors such as market expectations, economic data, and investor sentiment. While some analysts predict a rally in stocks after a rate cut, others highlight concerns about balance sheet and tapering. It's important to closely monitor market developments and consider a range of perspectives to make informed investment decisions.

      09-18 19:03
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    • Shyon: 
      @TigerGPT how do you think 🤔
      09-18 19:02
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  • icycrystal
    ·09-18 15:31
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    hopefully it'll be 25 bps. slow and steady instead of raising too fast and high. this way, can see how market reacts...

    @GoodLife99 @LMSunshine @koolgal @Shyon @Aqa @Universe宇宙 @HelenJanet @rL @SPACE ROCKET @TigerGPT

    Do you expect 25 bps or 50 bps?


    Will market take a rally or plunge due to “sell the fact“?


    Can S&P 500 achieve new all-time-highs this year?


    Leave your comments and also post to win tiger coins~

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    • TigerGPT: 

      As an AI language model, I don't have personal opinions or the ability to predict market movements with certainty. However, I can provide you with some general information.

      The expectation for the magnitude of the interest rate hike, either 25 bps or 50 bps, depends on various factors such as economic indicators, inflation rates, and central bank policies. It is the decision of the central bank, which considers these factors along with other economic conditions.

      Regarding market reactions, it can vary. In some cases, a small rate hike may be seen as a positive sign of economic growth and stability, leading to a potential market rally. On the other hand, a larger-than-expected rate hike may raise concerns about economic overheating and lead to market volatility or even a decline.

      "Sell the fact" refers to a phenomenon where market participants sell off their positions after an anticipated event, such as an interest rate hike, occurs. This can result in temporary price declines, as the market has already priced in the event beforehand.

      As for the S&P 500 reaching new all-time highs, it is possible but uncertain. The performance of the stock market depends on various factors, including earnings growth, economic conditions, investor sentiment, and geopolitical events. Goldman Sachs' forecast of a 6% rise over the next 12 months is just a prediction and may not be completely accurate.

      Please note that investing in the stock market involves risks, and it is always essential to carefully evaluate your investment decisions and consider professional financial advice.

      09-18 15:31
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  • MHh
    ·09-18 21:10
    I’m still expecting 25bps cut as Powell has been cautious against making big changes even with the first rate hike. I do expect the market to rally if Powell gives the market its expectations but there will be profit takers. For the rest of the year, I don’t think the S&P500 to increase much higher due to the elections that will take place at the end of the year and there is a good chance of economic slowdown that will spark fears of recession again.
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  • Success88
    ·09-18 15:45
    I think Fed will cut 25 basis. Market will be up by then.
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  • SPACE ROCKET
    ·09-18 15:50
    25 bps. 50 bps may scare the markets into thinking that recession is looming. 50 bps may also be too aggressive; we still want inflation to go down, not cause it to go higher.
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  • Aqa
    ·09-19 00:05
    There will be a weeks-long rally for stocks after the Fed cuts rates, expecting stocks to climb higher in the coming weeks. After that, there will be a decline in the S&P 500 in the second half of the month.
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  • jhtiger
    ·09-19 07:03
    50bp, and a market rally please
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  • Mrzorro
    ·09-19 00:23
    I believe market will 🚀🚀🚀🚀🚀
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