iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT)

最新ニュース iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT)

iShares 20+ Year Treasury Bond ETF

The fund generally invests at least 90% of its assets in the bonds of the underlying index and at least 95% of its assets in U.S. government bonds. The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.

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2020年6月以来、消費者物価指数（CPI）報告が連邦公開市場委員会（FOMC）の会合と同日に発表されるのは初めてのことだ。このことは、金融市場にとって潜在的にボラティルな水曜日を予示している。

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A hotter-than-expected jobs report spurred a premarket rally on Wall Street Friday, showcasing the U.S. economy&#8217;s resilience and easing concerns <a href="https://www.benzinga.com/economics/macro-economic-events/24/10/41184080/us-economy-adds-254-000-new-jobs-in-september-smashes-expectations-unemployment-f">over an economic slowdown. </a>
The strong labor data also led traders to rethink the Federal Reserve&#8217;s aggressive rate cuts, resulting in a jump in the dollar and Treasury yields.
What Happened: The U.S. economy added 254,000 jobs in September, far exceeding the expected 140,000. This marks an acceleration from August&#8217;s 159,000 figure and well above the 12-month average of 230,000. Payrolls for both July and August were upwardly revised by 55,000 and 17,000, respectively.
Private sector payrolls accounted for 223,000 jobs, while the government added 31,000. The unemployment rate fell unexpectedly by 0.1% to 4.1%, beating the forecasted 4.2%.
Wages grew by 0.4% in September, surpassing the expected 0.3%. 
Why It Matters: The stronger-than-expected pace of job addition, coupled with a surprisingly lower unemployment rate and higher wage growth, signals a strong consumer spending outlook, which could lift corporate earnings, particularly as we head into the fourth quarter.
Yet the labor market&#8217;s strength also complicates the Federal Reserve&#8217;s efforts to curb inflation. Higher wages could stoke consumer demand, putting upward pressure on prices, potentially slowing disinflation efforts. This may lead the Fed to delay or scale back anticipated interest rate cuts.
Before the jobs report, the market had priced in a 30% chance of a 50-basis-point rate cut in November, according to the CME FedWatch Tool. Following the data release, those odds plummeted to 11%. 
<h3 class="wp-block-heading">Market Reactions:</h3>
<ul>
<li>The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) jumped 0.9% in premarket trading, edging closer to its recent record highs.</li>
<li>The Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which tracks major tech stocks, rallied 1.4%, driven by strong gains in the semiconductor sector. The iShares Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NYSE">SOXX</a>) surged 2.1%.</li>
<li>Blue chips rose as well, with the SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) up by 0.7%.</li>
<li>Small caps outperformed large caps. The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) rallied 1.7%. </li>
<li>Yields on the 10-year Treasury bond soared by 11 basis points to 3.96%. Yields on the policy-sensitive two-year note spiked by 15 basis points to 3.87%.</li>
<li>The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) tumbled 1.2%. </li>
<li>The U.S. Dollar Index, which is tracked by the&nbsp;Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), rose 0.7%.</li>
</ul>
<h3 class="wp-block-heading">Top Gainers Post-Jobs Report:</h3>
Using the Movers function on <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent100424&amp;t=be2bearmibe3na1">Benzinga Pro</a>, here are the top performers among U.S. mega-cap stocks in the 30 minutes following the release of the September jobs data.
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Company Name</th>
<th>Price</th>
<th>Change</th>
</tr>
</thead>
<tbody>
<tr>
<td>KLA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KLAC#NASDAQ">KLAC</a>)</td>
<td>$799.25</td>
<td>+3.18%</td>
</tr>
<tr>
<td>Mitsubishi UFJ Financial Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MUFG#NYSE">MUFG</a>)</td>
<td>$10.18</td>
<td>+3.18%</td>
</tr>
<tr>
<td>Applied Materials Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMAT#NASDAQ">AMAT</a>)</td>
<td>$205.53</td>
<td>+2.10%</td>
</tr>
<tr>
<td>Lam Research Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LRCX#NASDAQ">LRCX</a>)</td>
<td>$83.60</td>
<td>+2.08%</td>
</tr>
<tr>
<td>Advanced Micro Devices Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>)</td>
<td>$166.90</td>
<td>+1.92%</td>
</tr>
<tr>
<td>ARM Holdings plc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ARM#NASDAQ">ARM</a>)</td>
<td>$142.44</td>
<td>+1.91%</td>
</tr>
<tr>
<td>Shopify Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHOP#NYSE">SHOP</a>)</td>
<td>$80.02</td>
<td>+1.67%</td>
</tr>
<tr>
<td>Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>)</td>
<td>$175.66</td>
<td>+1.66%</td>
</tr>
<tr>
<td>Adobe Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADBE#NASDAQ">ADBE</a>)</td>
<td>$510.58</td>
<td>+1.59%</td>
</tr>
<tr>
<td>Bank of America Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAC#NYSE">BAC</a>)</td>
<td>$39.96</td>
<td>+1.56%</td>
</tr>
<tr>
<td>Texas Instruments Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TXN#NASDAQ">TXN</a>)</td>
<td>$204.82</td>
<td>+1.56%</td>
</tr>
</tbody>
</table>
</figure>
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S&P 500 Nears Record Highs On Hot Jobs Data: Dollar, Treasury Yields Surge As Aggressive Interest Rate Cut Hopes Fade

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/10/2024-10-03_08h44_42.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">Cognitive Dissonance</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-bonds-israel-strike-iran-tlt-mc-10032024">click here</a> for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>The chart shows when the Fed rate cut was announced.</li>
<li>At the time the Fed rate cut was announced, this was the landscape:
<ul>
<li>Wall Street firms were tripping over themselves to rush their clients into buying long bonds.</li>
<li>The momo crowd was aggressively buying long bonds.</li>
<li>Technically, long bonds had broken out.</li>
<li>Trading services were sending signals to their members to go all in on buying long bonds.</li>
<li>Almost everyone was predicting that bond yields would fall much lower.</li>
</ul>
</li>
<li>Long bonds move inversely to the yield.&nbsp; When yield goes higher, long bonds fall.</li>
<li>On the morning before the Fed rate cut announcement, The Arora Report made a bold call contrary to the prevailing wisdom.  The call was inline with prior calls that long bond yields may rise and long bonds may fall after the rate cut.  We wrote:</li>
</ul>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">One unintended consequence may be a rise in long term yields in due course.
</blockquote>
<ul>
<li>The chart shows that long bonds have fallen and yields have risen.</li>
<li>The chart shows that the breakout above the resistance zone failed.&nbsp; Ironically, this breakout was the reason legions of investors who rely only on traditional technical analysis bought long bonds on the breakout. To make matters worse, most of such bond trading positions are taken on high leverage.&nbsp; Due to high leverage, these positions now have substantial losses.
<ul>
<li>This is a cautionary tale that illustrates why investors should not rely solely on one form of analysis such as traditional technical analysis. Investors should rely on systems, such as The Arora Report system, that synergistically combine in an optimized manner the best elements of the following:
<ul>
<li>Macro analysis</li>
<li>Fundamental analysis</li>
<li>Technical analysis</li>
<li>Quantitative analysis</li>
</ul>
</li>
</ul>
</li>
<li>Money is flowing into the safety of Treasuries due to anxiety about potential escalation of conflict in the Middle East.&nbsp; In The Arora Report analysis, if it was not for the escalation in the Middle East, TLT would have been much lower now.</li>
<li>Going forward, investors need to remember the probability adjusted risk reward ratio in long bonds is not great.  Long bonds will work only if there is a major recession or a major war breaks out.  However, investors need to remember that the stock market is counting on no recession. Investors are suffering from cognitive dissonance – they are buying stocks believing that there will not be a recession, they are buying bonds believing there will be a recession.</li>
<li>If inflation starts rising again, investors in long bonds will experience major losses.&nbsp; Investors are very short sighted and are also losing track of the fact that the election is not far away.&nbsp; Both Trump and Harris are committed to more reckless borrowing and more reckless spending.&nbsp; This will increase the supply of Treasuries.&nbsp; How can a higher supply of Treasuries be good for long bonds?&nbsp; The answer is that it is not good for long bonds.</li>
<li>On the positive side, NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), CEO Jensen Huang says Blackwell production is in full swing and the demand for Blackwell is insane.</li>
<li>Also on the positive side, OpenAI has raised $6.6B in new funds at a valuation of $157B.&nbsp; This valuation is significantly higher than the last round.</li>
<li>Anxiety is building among investors regarding the upcoming strike on Iran by Israel.&nbsp; There are reports that Israel wants to attack Iran's nuclear installations, but Biden is trying to restrain Israel.</li>
<li>Initial jobless claims came at 225K vs. 223K consensus.&nbsp; Jobless claims are not showing weakness in the jobs picture.&nbsp; Powell saw weakness in the jobs picture, and that was one of his justifications for the 50 bps rate cut.&nbsp; More information will become available about the jobs picture tomorrow when the official jobs report is released at 8:30am ET.&nbsp; The jobs report has the potential to be a major market moving event.</li>
<li>ISM Non-Manufacturing Index will be released at 10am ET.&nbsp; The consensus is 51.6.&nbsp; This data may be market moving.</li>
</ul>
<h3 class="wp-block-heading">China</h3>
The stock buying stampede in Hong Kong is slowing.  Mainland markets are closed.  Prudent investors are taking advantage of the rally to sell.  As full disclosure, The Arora Report&#8217;s plan continues to be to buy on a dip.  The Arora Report has new buy zones for Mainland China ETF Xtrackers Hvst CSI 300 China A Shs ETF Class A (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ASHR#NYSE">ASHR</a>) and Hong Kong ETF iShares China Large-Cap ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXI#NYSE">FXI</a>) in The Arora Report&#8217;s ZYX Emerging.
<h3 class="wp-block-heading">India</h3>
Growth concerns are emerging in India.  Money is beginning to flow out of India and into China.  As full disclosure, The Arora Report has new signals on India ETF WisdomTree India Earnings Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EPI#NYSE">EPI</a>), VanEck India Growth Leaders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLIN#NYSE">GLIN</a>), and iShares MSCI India Small-Cap ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/SMIN#BATS">SMIN</a>) in The Arora Report&#8217;s ZYX Emerging.
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in NVDA.
In the early trade, money flows are neutral in Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>).
In the early trade, money flows are negative in Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), and Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>).
In the early trade, money flows are negative in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is seeing selling along with junk stocks.
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges.&nbsp; The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.&nbsp; If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp; A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

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Investors Suffering Cognitive Dissonance, Insane Demand For Nvidia Chips, Anxiety Builds About Israel And Iran

Economic activity in the U.S. services sector continued to expand in September, as the Services PMI reached 54.9%, its highest level since February 2023, <a href="https://www.benzinga.com/topic/pmi">marking a robust recovery</a>.
According to the Services ISM Report On Business released on Thursday, this increase of 3.4 percentage points from August's 51.5% reflects strong growth in business activity and new orders. 
The report raises concerns about how it may influence upcoming Federal Reserve rate cuts. With the services sector expanding for 49 of the last 52 months, the data suggests resilient demand, which could influence the Fed's decision on the size of the anticipated November cut.
According to the CME FedWatch tool, traders now see a 65.6% probability of a 25-basis point rate cut in November, with a 34.4% chance of a 50-basis point cut.
Also on Thursday, the S&amp;P Global US Services PMI Business Activity Index posted 55.2 in September. That&#8217;s slightly down from 55.7 in August. This marked the 20th consecutive month of expansion in services activity. New orders continued to rise solidly, although input prices increased at the joint-fastest pace in a year, driven by salary pressures and higher costs for manufactured goods.
Employment dropped for the second month, but companies remained cautious about hiring due to strong cost pressures. Business confidence declined sharply to its lowest level since October 2022 as concerns about an economic slowdown grew.
<h3 class="wp-block-heading">September ISM Services PMI Report: Key Highlights</h3>
<ul>
<li>The Services PMI rose to 54.9% in September, the highest reading since February 2023.</li>
<li>Business activity expanded significantly, with the Business Activity Index climbing to 59.9%.</li>
<li>The New Orders Index increased to 59.4%, up from 53% in August.</li>
<li>The Employment Index contracted to 48.1%, down from 50.2% in August.</li>
<li>The Supplier Deliveries Index returned to expansion, hitting 52.1%.</li>
<li>Panelists expressed concerns over political uncertainty and labor costs, despite positive supply chain improvements.</li>
</ul>
<h3 class="wp-block-heading">Experts React To September Data</h3>
Steve Miller, chair of the ISM Services Business Survey Committee, highlighted the continued expansion in services. "Twelve industries reported growth in September, up two from the 10 industries reporting growth in August,&#8221; he said.
&#8220;The Supplier Deliveries Index returned to expansion in September, indicating slower delivery performance,&#8221; Miller added. &#8220;The stronger growth indicated by the index data was generally supported by panelists' comments; however, concerns over political uncertainty are more prevalent than last month&#8221;
Chris Williamson, chief business economist at S&amp;P Global Market Intelligence, said, &#8220;U.S. service sector businesses reported a strong end to the third quarter, with output continuing to grow at one of the fastest rates seen over the past two-and-a-half years.&#8221; 
Still, he also noted that &#8220;companies have become increasingly concerned about the outlook… with business confidence slumping in September amid uncertainty caused by the upcoming election as well as perceptions of rising recession risks.&#8221;
<h3 class="wp-block-heading">Market Reactions</h3>
Markets were trading lower on Thursday following the data release.
The S&amp;P 500, tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), was trading 0.5% lower.
The U.S. dollar index (DXY), tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), was up 0.31%
Other major asset movements following the ISM Services PMI print included: 
<ul>
<li>The Nasdaq 100, as monitored through the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), was down 0.3%.</li>
<li>The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), tracking long-dated Treasuries, was down 0.63%.</li>
<li>Gold, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), was down 0.3%.</li>
</ul>
Image created using artificial intelligence via Midjourney.

Services Sector Surges In September, Raising Questions For Fed's November Rate Cut

The stock market is about to make a major shift, this time driven by the shift in monetary policy set on by the Federal Reserve (the Fed). After the most recent meeting to decide the new path of interest rates for the United States, Jerome Powell (the Fed chairman) cut interest rates by the most aggressive pace in 16 years.
That means a few things for the stock market, but investors must understand that not all industries will be affected equally. The ones that deserve a second &ndash; or deeper &ndash; look are those that depend on consumer and financial trends, sectors like consumer discretionary and real estate. There&#39;s even a historical tendency for oil prices to do well on lower interest rates. Hence, the energy sector deserves a spot on this list as well.
Within these spaces, names like Nike Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nke#NYSE">NKE</a>), Chesapeake Energy Co. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/chk#NASDAQ">CHK</a>), and even SoFi Technologies Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sofi#NASDAQ">SOFI</a>) carry enough reasons to potentially become relative winners in the coming quarters, especially as money and investors begin to shift their preferences to match this new business cycle.
<h2>Consumer Stocks Like Nike Poised for a Comeback with Rate Cuts on the Horizon</h2>
Nike shares have been volatile recently, particularly after the company reported a less-than-spectacular quarter. Leaning on China slowdowns and weakening U.S. consumer sentiment, bears raided Nike stock after the results came out.
However, some on Wall Street saw far ahead enough to pick up this stock at its lows, such as billionaire hedge fund manager Bill Ackman. More than that, analysts at Sanford C. Bernstein see the stock as worth up to $109 a share, calling for up to 32.4% upside from where it trades today.
Reacting to the recent Wall Street bullishness and institutional buying, bears retreated from further selling this stock, as Nike stock&#39;s short interest declined by 14.5% in the past month alone. The stock still trades at only 67% of its 52-week high, leaving enough room for investors to catch a further recovery rally.
<h2>Energy Stocks Are Strong, But Chesapeake Stock Stands Out as the Better Pick</h2>
Over the past month, shares of Chesapeake have gone on a bit of a tear, rallying by as much as 7.5% as front-run expectations for Fed interest rate cuts started to influence the energy sector positively. One big investor who saw this trend coming is Warren Buffett.
Based on this belief, Buffett bought up to 29% of Occidental Petroleum Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>), but retail investors have an advantage over mega investors like Buffett. They can choose smaller companies, especially those placed higher in the industry&#39;s value chain and paid first.
Chesapeake Energy stock is one example, and Wall Street knows this. Those at Stephens see a potential bull case in which this stock reaches a valuation of $118 a share, daring it to rally by as much as 53.6% from where it trades today. Considering Chesapeake is still only 83% of its 52-week high, investors have a new reason to call for new highs.
That reason is interest rate cuts, which typically help boost business activity and demand, which rely on oil for manufacturing and transport. As oil prices recover based on these trends, Chesapeake stock might be at the center of the bullish price action, given its place in the value chain for exploration and production.
<h2>Lower Mortgage Rates Could Propel SoFi Stock to New Heights</h2>
Many would-be home buyers are sitting on the sidelines, waiting for more affordable financing rates through more accessible mortgages. Investors should remember that when interest rates come down, so do mortgage rates, enabling new home buyers to enter the market.
This is where SoFi stock comes into play and why Wall Street holds it in such high regard. Now that the stock is down to 80% of its 52-week high, there are a few more tailwinds in place to let investors assume this name could make its way back and even make a new high.
Wall Street analysts forecast up to $0.07 in earnings per share (EPS) in SoFi stock for the next 12 months, up from today&#39;s EPS of $0.01. This is a seven-fold jump in profits, meaning some of the current price targets and valuations might have to be adjusted upward in face of this potential spike.
Those at Dimensional Fund Advisors saw enough reason to boost their holdings in SoFi stock by up to 263.3% as of August 2024, bringing their net investment to $86.5 million today, or 1.2% ownership in the company.
<h2>Wall Street&#39;s Latest Top Pick Comes from a Different Market</h2>
Stanley Druckenmiller (responsible for George Soros&#39; returns) decided to sell out of the U.S. technology sector and sought to relocate his winnings into the bond market. Remember how mortgage rates come down during Fed cuts? So do bond yields.
Just like any other fixed-income product, prices are inversely related to yield, so as bond yields come down, their prices will go up. Investors can copy Druckenmiller&#39;s playbook and check out the iShares 20+ Year Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tlt#NASDAQ">TLT</a>) for potential exposure.
The ETF has recently declined by roughly 3% from its highs. However, momentum is still bullish enough to suggest further upside from this level, especially as the Fed might keep cutting rates for the next 12 months, bringing the price of bonds higher and higher.
The article &quot;<a href="https://www.marketbeat.com/stock-ideas/4-stocks-set-to-benefit-from-recent-interest-rate-cuts/">4 Stocks Set to Benefit from Recent Interest Rate Cuts</a>&quot; first appeared on MarketBeat.

Earnings

Large Cap

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Financing

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Analyst Ratings

Tech

SOFI

4 Stocks Set to Benefit from Recent Interest Rate Cuts

As the market anticipates the release of the August Personal Consumption Expenditures (PCE) report, the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) is sending clear signals <a href="https://www.benzinga.com/markets/bonds">for fixed-income investors</a>.
Since the Fed cut interest rates by 50 basis points last week, TLT's price has fallen by 1.77%. This suggests that investors had already anticipated the rate cut, and their focus has shifted to ongoing concerns about inflation not cooling as much as expected, which may be driving skepticism in the bond market.
<h2 class="wp-block-heading">How TLT May React To The PCE Report</h2>
Analysts are looking for a modest 0.1% increase in month-over-month inflation for August, with an annual figure expected at 2.3%. If the PCE report shows lower inflation than expected, TLT could see a boost in price.
However, if inflation readings come in higher than expected, TLT might face more downward pressure, raising concerns about future inflation.
Read Also: <a href="https://www.benzinga.com/markets/bonds/24/09/40993114/companies-run-to-bond-markets-after-last-weeks-fed-rate-cut">Companies Run To Bond Markets After Last Week&#8217;s Fed Rate Cut</a>
<h2 class="wp-block-heading">Short-Term Vs. Long-Term Bonds</h2>
The recent decline in TLT highlights the need for investors to see solid evidence that inflation is under control before committing to longer-term bonds.
Interestingly, the yield curve is steepening, which means investors might want to shift their focus from short-term investments to longer-term bonds.
For the first time in over two years, the yield on 10-year Treasuries has surpassed that of two-year Treasuries, signaling a potential trend shift.
According to Ian Lyngen, a strategist at BMO Capital Markets, this <a href="https://www.barrons.com/articles/treasuriy-bonds-bills-curve-steepener-d74efd5f">suggests</a> investors are becoming more aware of the risks associated with rising inflation, Barron&#8217;s reports.
<h2 class="wp-block-heading">Why The PCE Report Is Crucial To TLT Investors</h2>
For TLT investors, this PCE report is crucial. 
Keep an eye on the inflation numbers; lower readings could indicate a buying opportunity, while higher readings may prompt a reevaluation of bond holdings. 
As the market adjusts to these dynamics, staying informed and ready to act will be key for maximizing returns in TLT.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/government/24/08/40654794/inflation-is-becoming-boring-again-as-numbers-are-right-on-target-economists">Inflation Is &#8216;Becoming Boring Again&#8217; As Numbers Are &#8216;Right On Target&#8217;: Economists</a></li>
</ul>
Photo: Shutterstock

Long Ideas

Specialty ETFs

Treasury Bond ETF Under Pressure Ahead Of Key Inflation Data: What Investors Should Know

Chicago Federal Reserve President Austan Goolsbee hinted at a series of interest rate cuts over the next 12 months in a discussion at the Economic Club <a href="https://www.benzinga.com/topic/federal-reserve">of Minnesota on Monday. </a>
&#8220;We have a long way to come down to get the interest rate to something like neutral,&#8221; Goolsbee said, suggesting that the Fed is preparing to shift away from its current restrictive stance to support economic conditions as the key focus shifts from inflation to the labor market. 
Goolsbee warned a 0.7% increase in unemployment within a year is typically a precursor to a recession, noting that labor market deterioration often happens rapidly.
While acknowledging unemployment is on an upward trajectory, he highlighted that the overall rate remains relatively low, and the Fed remains watchful of the balance between inflation risks and employment trends.
&#8220;At this time, there&#8217;s little evidence that inflation is stalling out at 3%,&#8221; Goolsbee added, underscoring the Fed's commitment to managing inflation risks without undermining the labor market.
&#8220;There are some warning signs, but the economy still has underlying strength,&#8221; Goolsbee said. He highlighted recent upticks in unemployment primarily reflect an increase in labor force participation, with payrolls continuing to grow and consumer spending holding steady.
Interest rate futures are currently pricing in nearly equal odds of a 25 or 50 basis point cut at the Fed's November meeting, according to the CME FedWatch tool.
U.S. Treasury bonds edged lower on Monday, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) slipping 0.2% by the close of trading.
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"> 
<div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Q&amp;A with Austan Goolsbee at the Economic Club of Minnesota" width="500" height="281" src="https://www.youtube.com/embed/gzdEy4LFct4?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div>
</figure>
<h1 class="wp-block-heading">Fitch Ratings See Only &#8216;Modest&#8217; Rate Cuts Ahead</h1>
The Federal Reserve&#8217;s easing cycle is expected to be &#8220;modest&#8221; compared to historical rate-cutting episodes, despite the surprising 50-basis-point reduction at last week's FOMC meeting. 
Fitch Ratings now forecasts the federal funds rate to fall to 4.5% by the end of 2024, and further to 3.5% by the close of 2025. By mid-2026, the rate could stabilize at a neutral level of 3.0%.
Fitch Ratings expects the Fed to implement a 25-basis-point rate cut in both November and December 2024, followed by four additional 25-basis-point cuts through 2025. The agency anticipates that the Fed will lower rates at alternating FOMC meetings next year, signaling a gradual approach to easing monetary policy.
Despite the anticipated cuts, Fitch does not foresee a sharp decline in the U.S. job market. Instead, the agency believes the labor market's current softness is part of a natural recovery in the workforce after the volatility of the past 12-18 months.
With payroll growth continuing and consumer demand holding up, the Fed's cautious approach appears to be aimed at managing economic risks without triggering a sharp downturn.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/asia/24/09/40986319/chinese-stocks-defy-bidens-auto-import-ban-concerns-rally-to-4-month-highs-as-central-bank-unexpecte">Chinese Stocks Defy Biden&#8217;s Auto Import Ban Concerns, Rally To 4-Month Highs As Central Bank Unexpectedly Slashes Interest Rates</a></li>
</ul>
Photo: Shutterstock

Fed's Goolsbee Signals Multiple Rate Cuts Ahead, Cites Recession Warning Signs As Unemployment Rises

Economic activity in the U.S. private sector grew at a slightly faster pace than anticipated in September, marking a stark contrast between the healthy services sector and the struggling manufacturing industry, according to the flash estimates from the Purchasing Managers&#8217; Index (PMI) report released by <a href="https://www.benzinga.com/topic/macro-economic-events">S&amp;P Global on Monday.</a>
Despite better-than-expected readings for both the composite and services PMIs, two concerning trends emerged from September's surveys. 
First, the manufacturing sector&#8217; deepened contraction&#8217;s contraction deepened, with output levels hitting their lowest level since December 2023. Second, inflationary pressures resurfaced, notably in the same month the Federal Reserve announced <a href="https://www.benzinga.com/markets/equities/24/09/40965372/fed-delivers-large-interest-rate-cut-in-bid-to-sustain-labor-market-stocks-gold-set-new-record-h">a 50-basis-point interest rate cut</a>, with signals of further cuts ahead.
<h3 class="wp-block-heading">September Flash PMI Reports: Key Highlights</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Index</th>
<th>September 2024</th>
<th>August 2024</th>
<th>Forecast (September)</th>
</tr>
</thead>
<tbody>
<tr>
<td>Composite PMI</td>
<td>54.4</td>
<td>54.6</td>
<td>54.3</td>
</tr>
<tr>
<td>Services PMI</td>
<td>55.4</td>
<td>55.7</td>
<td>55.3</td>
</tr>
<tr>
<td>Manufacturing PMI</td>
<td>47.0</td>
<td>47.9</td>
<td>48.9</td>
</tr>
</tbody>
</table>
</figure>
<ul>
<li>Composite PMI: Eased from 54.6 in August to 54.4 but slightly outpaced the forecast of 54.3, as tracked by TradingEconomics.</li>
<li>Services PMI: Slowed from 55.7 to 55.4, still above the expected 55.3, signaling ongoing expansion.</li>
<li>Manufacturing PMI: Contracted more sharply, falling from 47.9 to 47, missing the expected improvement to 48.9.</li>
<li>Manufacturing orders shrunk and business expectations for the year ahead hit a two-year low, primarily due to rising political uncertainty ahead of the upcoming presidential election. This uncertainty is leading companies to freeze hiring and cut jobs, with employment levels falling for the second consecutive month.</li>
<li>Manufacturing payrolls were cut at the sharpest pace since June 2020, with factory job reductions at their steepest since January 2010 as firms grapple with weak demand.</li>
<li>September saw a marked a worrisome increase in average prices for goods and services, with the fastest rise since March. This was the first acceleration in selling price inflation in four months, intensifying concerns about the new Federal Reserve&#8217;s monetary policy easing stance.</li>
</ul>
<h3 class="wp-block-heading">Economist Insights</h3>
&#8220;The early survey indicators for September point to an economy that continues to grow at a solid pace […]. A reacceleration of inflation is meanwhile also signalled, suggesting the Fed cannot totally shift its focus away from its inflation target as it seeks to sustain the economic upturn,&#8221; said Chris Williamson, chief business economist at S&amp;P Global Market Intelligence.
The survey aligns with a &#8220;healthy&#8221; third-quarter GDP growth estimate of 2.2% annualized, Williamson said, but emphasized the economy&#8217;s overreliance on the services sector and a drop in business confidence tied to political instability.
Regarding the price pressures increase, he advised the Fed to move cautiously in implementing further rate cuts.
<h3 class="wp-block-heading">Market Reactions</h3>
<ul>
<li>U.S. Dollar Index (DXY): The dollar strengthened, with the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) trading 0.3% higher in early New York trading.</li>
<li>Treasury Yields: Both the 10-year yield and 30-year yield climbed by 5 basis points, sending the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) down by 0.8%.</li>
<li>Stock Market: The S&amp;P 500 – tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) – edged up 0.4%, staying within striking distance of last week's all-time highs.</li>
</ul>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/asia/24/09/40981254/chinese-vehicle-tech-faces-biden-administration-ban-over-national-security-concerns-china-ev-stocks">Chinese Vehicle Tech Faces Biden Administration Ban Over National Security Concerns: China EV Stocks Fall</a></li>
</ul>
Photo via Shutterstock.

US Services Growth Tops Estimate, Contraction In Manufacturing Worsens: 'Reacceleration Of Inflation'

Editor&#8217;s note: This story has been updated with additional information. 
Markets are bouncing Wednesday afternoon following the Federal Reserve&#8217;s decision to cut rates by 0.5%, marking the beginning of the central bank&#8217;s <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40918078/is-the-fed-playing-with-fire-we-see-greater-risk-of-an-overheating-economy-as-they-">highly anticipated cutting cycle</a>.
What To Know: Wednesday&#8217;s&nbsp;0.5% rate cut brings the&nbsp;target fed funds rate&nbsp;to a new range&nbsp;between 4.75% and 5%, down from a 23-year high of 5.25% to 5.5%. It&#8217;s also the first rate cut since March 2020.
The fed funds rate has been sitting at a range between&nbsp;5.25% and 5.5%&nbsp;since the central bank last hiked in July 2023.
The SPDR S&amp;P 500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), which tracks the <a href="https://www.benzinga.com/topic/s-p-500">S&amp;P 500</a> index, was up 0.44% at all-time highs at last check, led higher by a variety of names like Arm Holdings Plc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ARM#NASDAQ">ARM</a>), The Trade Desk Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TTD#NASDAQ">TTD</a>) Toyota Motor Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TM#NYSE">TM</a>), General Motors Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GM#NYSE">GM</a>) and Marriott International (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MAR#NASDAQ">MAR</a>).
The materials sector, as tracked by the Materials Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLB#NYSE">XLB</a>), was showing the most strength at the time of writing, climbing approximately 0.6% following the Fed decision. The energy sector, tracked by the Energy&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), was the weakest, down 0.3% following the rate cut. Energy stocks had performed well on Wednesday ahead of the Fed decision, which may explain some of the relative weakness in afternoon trading.
Here&#8217;s a look at how various ETFs tracking the price-weighted Dow Jones Industrial Average, tech stocks, small caps, treasuries and gold are faring following the Fed&#8217;s latest move.
<ul>
<li>SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>): up 0.38% at $418.87.</li>
</ul>
<ul>
<li>Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>): up 0.59% at $476.25.</li>
</ul>
<ul>
<li>IShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>): up 2.31% at $224.36. Small caps outperformed broader markets ahead of the rate cut and continued to outperform in afternoon trading.</li>
</ul>
<ul>
<li>IShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>): down 0.36% at $100.48.</li>
</ul>
<ul>
<li>SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>): up 0.66% at $239.02. Gold hit all-time highs following the Fed&#8217;s rate decision.</li>
</ul>
It&#8217;s also worth noting that crypto markets are volatile following the Fed decision on rates. Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) was down 0.86% over a 24-hour period, trading at $60,480, but well off its lows for the day, and Ethereum (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/eth/usd">ETH</a>) was down 1.79% at $2,322. 
Check This Out: <a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40926026/federal-reserve-delivers-bold-0-5-rate-cut-signals-further-easing-ahead">Federal Reserve Delivers Bold 0.5% Rate Cut, Signals Further Easing Ahead</a>
The increased volatility is likely a result of <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40883274/senator-warren-urges-fed-to-slash-rates-by-0-75-veteran-investor-warns-even-0-5-cut">uncertainty heading into the meeting</a>. According to CME&#8217;s <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">FedWatch tool</a>, the market was projecting a 61% chance of a larger 0.5% rate cut heading into the meeting versus a 39% chance of a smaller 0.25% cut.
As reported by Benzinga, the updated quarterly Dot Plot, which helps signal the Fed&#8217;s future policy intentions, indicates a more aggressive path for rate cuts than previously projected following Wednesday&#8217;s 0.5% cut. The median projection now calls for a total of 1% in rate cuts in 2024.
SPY Price Action: At the time of publication, the <a href="https://www.benzinga.com/quote/SPY">SPDR S&amp;P 500</a> was up 0.44%, trading at $565.62, according to <a href="http://pro.benzinga.com">Benzinga Pro</a>.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40908202/10-etfs-investors-secretly-bought-before-the-feds-make-or-break-interest-rate-cal">10 ETFs Investors Secretly Bought Before The Fed&#8217;s Make-Or-Break Interest Rate Call</a></li>
</ul>
Watch Fed Chair Jerome Powell&#8216;s press conference here: 
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"> 
<div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="&#x1f534;WATCH LIVE: Jerome Powell Speaks, FOMC Press Conference &#x7C; September 18th, 2024" width="500" height="281" src="https://www.youtube.com/embed/qVdXli47cWk?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div>
</figure>
This illustration was generated using artificial intelligence via Midjourney.

Small Cap

$ETH

S&P 500, Gold Strike All-Time Highs, Small Caps Rally After Fed Slashes Interest Rates For First Time In 4 Years (UPDATED)

Editor&#8217;s note: This story has been updated with additional details. 
The Federal Reserve slashed interest rates by 50 basis points Wednesday at its September Federal Open Market Committee meeting, lowering the federal funds rate to a range <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40921827/fed-decision-is-here-5-things-investors-need-to-know-ahead-of-wednesdays-pivotal-in">of 4.75% to 5%. </a>This marks the first rate cut in over four years and breaks a streak of 12 consecutive months with rates held steady.
The decision caught Wall Street analysts off guard who had largely anticipated a more modest 25-basis-point cut. The larger reduction resonated with investor sentiment, which had leaned toward a more aggressive easing approach at the start of the rate-cut cycle.
&#8220;The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent,&#8221; the FOMC statement says.
In its updated Summary of Economic Projections, the Fed marginally revised its forecasts. Economic growth for the current year was lowered to 2%, down from 2.1% in June, while projections for 2025 and 2026 were unchanged. Inflation projections saw downward revisions for both 2024 and 2025, while the unemployment rate was revised upward across 2024, 2025 and 2026.
<h3 class="wp-block-heading">Fed&#8217;s Summary of Economic Projections (Sept. 2024)</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Variable</th>
<th>2024</th>
<th>2025</th>
<th>2026</th>
<th>2027</th>
<th>Longer Run</th>
</tr>
</thead>
<tbody>
<tr>
<td>Change in real GDP</td>
<td>2.0</td>
<td>2.0</td>
<td>2.0</td>
<td>2.0</td>
<td>1.8</td>
</tr>
<tr>
<td>Jun projection</td>
<td>2.1</td>
<td>2.0</td>
<td>2.0</td>
<td></td>
<td>1.8</td>
</tr>
<tr>
<td>Unemployment rate</td>
<td>4.4</td>
<td>4.4</td>
<td>4.3</td>
<td>4.2</td>
<td></td>
</tr>
<tr>
<td>Jun projection</td>
<td>4.0</td>
<td>4.2</td>
<td>4.1</td>
<td></td>
<td></td>
</tr>
<tr>
<td>PCE inflation</td>
<td>2.3</td>
<td>2.1</td>
<td>2.0</td>
<td>2.0</td>
<td>2.0</td>
</tr>
<tr>
<td>Jun projection</td>
<td>2.6</td>
<td>2.3</td>
<td>2.0</td>
<td></td>
<td>2.0</td>
</tr>
<tr>
<td>Core PCE inflation</td>
<td>2.6</td>
<td>2.1</td>
<td>2.0</td>
<td>2.0</td>
<td></td>
</tr>
<tr>
<td>Jun projection</td>
<td>2.8</td>
<td>2.3</td>
<td>2.0</td>
<td></td>
<td></td>
</tr>
<tr>
<td>Federal funds rate</td>
<td>4.4</td>
<td>3.4</td>
<td>2.9</td>
<td>2.9</td>
<td>2.9</td>
</tr>
<tr>
<td>Jun projection</td>
<td>5.1</td>
<td>4.1</td>
<td>3.1</td>
<td></td>
<td>2.8</td>
</tr>
</tbody>
</table>
</figure>
<h3 class="wp-block-heading">Dot Plot Signals More Rate Cuts Ahead</h3>
The updated quarterly Dot Plot — a tool used by the FOMC to signal its future policy intentions — indicates a more aggressive path for rate cuts than previously projected.
The September median projection now points to 100 basis points of cuts in 2024, with the federal funds rate expected to fall to a midpoint of 4.4% by the end of this year. This suggests the Fed could enact 25 basis-point cuts at both the November and December meetings.
Further into the future, the Dot Plot signals the fed funds rate will drop to between 3.25% and 3.5% by the end of 2025, implying an additional 100 basis points of cuts. By the end of 2026 and the newly introduced projections for 2027, interest rates are expected to fall to 2.9%. 
This outlook marks a significant shift from the Fed&#8217;s June projections, which anticipated only one rate cut in 2024, followed by 100 basis points of cuts in both 2025 and 2026.
All eyes now turn to Fed Chair Jerome Powell&#8216;s press conference at 2:30 p.m. ET, where he is expected to provide further insights into the central bank&#8217;s decision and its outlook for the economy.
<h3 class="wp-block-heading">Market Reactions: Dollar Tumbles; S&amp;P 500, Gold Mark All-Time Highs; Small Caps Rocket</h3>
The 50-basis-point rate cut triggered a sharp fall in the value of the U.S. dollar, with the greenback weakening across the board, particularly against the Japanese yen which rose by 1%. 
The&nbsp;Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) tumbled 0.3% after the Fed&#8217;s decision. 
Treasury yields also fell markedly, pushing bonds higher. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) rose 0.2%. 
Gold prices soared 1%, with the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) setting fresh all-time highs. The S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) rose 0.4%, also hitting record highs. 
Small caps were the absolute winner in the post-Fed decision, with the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) rallying by 1.5%. 
<h3 class="wp-block-heading">Key Takeaways:</h3>
<ul>
<li>Rate decision: 50 basis points cut to 4.75%–5%.</li>
<li>Economic projections: Lower growth and inflation forecasts, higher unemployment projections.</li>
<li>Potential rate path: Dot plot signals 50 basis points more in cuts in 2024 and another 100 basis points in 2025. </li>
</ul>
Now read: 
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/09/40923390/20-s-p-500-stocks-that-move-the-most-when-the-fed-starts-cutting-interest-rates">20 S&amp;P 500 Stocks That Move The Most When The Fed Starts Cutting Interest Rates</a></li>
</ul>
&nbsp;Image created using artificial intelligence via Midjourney.

Federal Reserve Delivers Bold 0.5% Interest Rate Cut, Signals Further Easing Ahead (UPDATED)

As the Federal Reserve transitions from a restrictive monetary policy to a more accommodative stance, investors are questioning how this regime change will <a href="https://www.benzinga.com/topic/interest-rates">impact various asset classes. </a>
The central bank&#8217;s shift towards lower interest rates can have far-reaching implications across equities, bonds, and other markets.
Historically, stocks have tended to perform well following the Fed&#8217;s initial rate cuts—but with a crucial caveat: the economy must avoid slipping into a recession. An <a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40855247/fed-rate-cuts-and-s-p-500-the-why-matters-most-data-shows">analysis by Goldman Sachs</a> reveals that the S&amp;P 500 has experienced significant declines even after rate cuts if the U.S. economy entered a recession during those periods.
When it comes to bonds, lower interest rates have generally led to a decrease in bond yields, thus driving up bond prices. Unlike equities, this dynamic has historically played out somewhat independently of the economic cycle. However, &#8220;what's past is prologue&#8221; is not always a guarantee in financial markets.
<h2 class="wp-block-heading">&#8216;Quality Can Be Found Across Asset Classes&#8217;</h2>
According to Bank of America&#8217;s latest Research Investment Committee (RIC) report, investors can identify quality opportunities across various asset classes, particularly in today&#8217;s shifting market landscape.
BofA analysts suggest that in the U.S. equity space, investors should adopt a defensive stance, focusing on companies with high free cash flow.
Savita Subramanian, head of U.S. equity &amp; quantitative strategy at BofA, notes that S&amp;P 500 valuations indicate low price returns for the next decade, making dividend payouts more crucial for total returns.
<ul>
<li>Utilities: Recently <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40823561/this-under-the-radar-defensive-ai-sector-quietly-outperforms-all-others-despite-rec">upgraded to Overweight by BofA, </a>the utilities sector stands out for its defensive characteristics and competitive yield. Subramanian indicates that growing power demand driven by AI-linked data centers bolsters the outlook for utility companies. ETFs like the First Trust Utilities AlphaDEX ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXU#NYSE">FXU</a>) and the Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) are potential plays in this space.</li>
<li>Real Estate: Offering higher quality yield than before, with 70% of the sector rated B+ or better, the real estate sector provides attractive options. BofA notes that the S&amp;P 500 real estate segment has relatively low office exposure, which could mitigate some risks. Recommended ETFs include the Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) and iShares Cohen &amp; Steers REIT ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ICF#NYSE">ICF</a>).</li>
<li>Consumer Staples: BofA finds the consumer staples sector tactically attractive, especially ETFs like the Consumer Staples Select Sector SPDR ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>), which has substantial exposure to resilient companies like The Procter &amp; Gamble Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PG#NYSE">PG</a>), Costco Wholesale Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COST#NASDAQ">COST</a>), Walmart Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>). Another sector play here is the iShares U.S. Consumer Staples ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYK#NYSE">IYK</a>). </li>
<li>Value, Quality, Dividends, and Buybacks: The bank is also bullish on factor-based ETFs, recommending exposure in value, quality, dividend, and buyback amid a strong free cash flow yield and potential for higher payouts than the broader S&amp;P 500 index. ETFs in this category include the Vanguard Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTV#NYSE">VTV</a>), Pacer US Cash Cows 100 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COWZ#NYSE">COWZ</a>), Schwab US Dividend Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHD#NYSE">SCHD</a>), and iShares Core Dividend ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIVB#NYSE">DIVB</a>).</li>
</ul>
Outside the U.S., Bank of America is bullish on Japanese equities as effective corporate reforms are expected &#8220;to unleash a mountain of cash.&#8221; The WisdomTree Japan Hedged Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DXJ#NYSE">DXJ</a>) is a top pick in this market, having gained 125% since 2019. This ETF also offers protection against the yen&#8217;s devaluation. 
In the fixed-income market, BofA suggests exposure to AAA-rated collateralized loan obligations (CLOs) and long-dated Treasury bonds.
<ul>
<li>CLOs: BofA recommends the Janus Henderson AAA CLO ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JAAA#NYSE">JAAA</a>), viewing these loans as quality yield options that have withstood stress during both the 2008 financial crisis and the 2020 pandemic-induced downturn.</li>
<li>Long-Dated Treasuries: Investors looking for duration exposure can consider the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), which tracks long-dated Treasury bonds with a 17-year duration.</li>
</ul>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Asset Class</th>
<th>Name</th>
</tr>
</thead>
<tbody>
<tr>
<td colspan="3">Equities</td>
</tr>
<tr>
<td>Utilities</td>
<td>First Trust Utilities AlphaDEX ETF</td>
</tr>
<tr>
<td>Utilities </td>
<td>Utilities Select Sector SPDR Fund</td>
</tr>
<tr>
<td>Real Estate</td>
<td>Real Estate Select Sector SPDR Fund </td>
</tr>
<tr>
<td>Real estate</td>
<td>iShares Cohen &amp; Steers REIT ETF</td>
</tr>
<tr>
<td>Consumer staples</td>
<td>Consumer Staples Select Sector SPDR ETF </td>
</tr>
<tr>
<td>Consumer staples</td>
<td>iShares U.S. Consumer Staples ETF</td>
</tr>
<tr>
<td>Value</td>
<td>Vanguard Value ETF</td>
</tr>
<tr>
<td>Quality</td>
<td>Pacer US Cash Cows 100 ETF </td>
</tr>
<tr>
<td>Dividend</td>
<td>Schwab US Dividend Equity ETF</td>
</tr>
<tr>
<td>Buybacks</td>
<td>iShares Core Dividend ETF </td>
</tr>
<tr>
<td>Japan</td>
<td>Wisdom Tree Japan Hedged Equity ETF</td>
</tr>
<tr>
<td colspan="3">Fixed income</td>
</tr>
<tr>
<td>Credit</td>
<td>Janus Henderson AAA CLO ETF</td>
</tr>
<tr>
<td>Duration</td>
<td>iShares 20+ Year Treasury Bond ETF </td>
</tr>
</tbody>
</table>
</figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40887448/long-dated-treasury-bond-etf-hits-14-month-highs-ahead-of-imminent-fed-rate-cut">Long-Dated Treasury Bond ETF Hits 14-Month Highs Ahead Of Imminent Fed Rate Cut</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

REIT

New ETFs

Real Estate

COST

COWZ

DIVB

WisdomTree Trust Japan Total Dividend Fund

iShares Trusthen & Steers Realty Majors Index Fund

iShares Trust Dow Jones USnsumer Goods Sector Index Fund

JAAA

SCHD

XLRE

13 ETFs To Own As Fed Set To Cut Rates: Analysts Highlight Utilities, Real Estate, And More

The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) surged 0.8% on Monday, climbing above $101 per share to its highest level since July 2023 as investors anticipate an imminent interest rate cut <a href="https://www.benzinga.com/topic/interest-rates">by the Federal Reserve.</a>
On the same day, Yields on the 30-year U.S. Treasury bond dropped to 3.93%, marking their lowest levels since late July 2023, indicating higher demand for bonds. 
The Federal Open Market Committee (FOMC) is set to meet on Sept. 18, and while a rate cut is a sure thing, the size of it remains uncertain.
Probabilities derived from fed futures — as tracked by the CME FedWatch tool — indicate a 61% chance of a 50-basis-point rate cut, bringing the federal funds rate down to a range of 4.75-5%. Yet, there is also a 39% chance of a smaller, 25-basis-point cut.
<h3 class="wp-block-heading">Chart: TLT ETF Hits July 2023 Highs Amid Rising Speculation Of A 0.5% Rate Cut</h3>
<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1024" height="438" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/16161620/image-122-1024x438.png" alt="" class="wp-image-550527" style="width:920px;height:auto" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/16161620/image-122-1024x438.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/16161620/image-122-300x128.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/16161620/image-122-768x329.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/16161620/image-122-1536x658.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/16161620/image-122.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Image: <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent081624&amp;t=be2bearmibe3na1">Benzinga Pro</a></figcaption></figure>
<h3 class="wp-block-heading">Analysts And Media Remain Divided</h3>
Top financial media outlets have increasingly leaned toward the likelihood of a 50-basis-point cut. They argue that current interest rates are overly restrictive given the state of inflation and the labor market.
However, Wall Street analysts and big banks (i.e., Goldman Sachs and Bank of America) are cautious. They forecast a more modest 25-basis-point cut.
Bank of America did, however, note that a &#8220;weak retail sales report&#8221; on Tuesday could tip the scales toward more aggressive easing. &#8220;A very weak retail sales report&#8221; would likely signal weakening consumer spending, potentially prompting the Fed to initiate a larger rate cut to support economic activity.
Goldman Sachs economist David Mericle commented that a larger cut would be &#8220;somewhat out of keeping with usual Fed practice.&#8221; He highlighted that such significant cuts are typically reserved for clear economic crises or notable spikes in unemployment.
Veteran Wall Street investor Ed Yardeni also weighed in on the debate. 
&#8220;Fifty is the usual amount kicking off an easing cycle, but the economic circumstances are different this time,&#8221; he said. &#8220;There's no recession clearly barreling toward us.&#8221;
According to Yardeni, if the Fed opts for a larger cut, stock prices could continue to soar, potentially inflating a bubble reminiscent of the dot-com era.
&#8220;25bps would be enough for now pending the next batch of data releases—which we expect once again will confirm the economy's resilience,&#8221; he added. 
Now Read:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40883274/senator-warren-urges-fed-to-slash-rates-by-0-75-veteran-investor-warns-even-0-5-cut">Elizabeth Warren Urges Fed To Slash Rates By 0.75%; Veteran Investor Warns Even 0.5% Cut Could &#8216;Reduce Trump&#8217;s Chances Of Winning&#8217;</a></li>
</ul>
Image: Shutterstock

Long-Dated Treasury Bond ETF Hits 14-Month Highs Ahead Of Imminent Fed Rate Cut

A broadly softer-than-expected U.S. producer inflation report triggered market shifts on Thursday, driving down the value of the dollar and Treasury yields while boosting gold prices to <a href="https://www.benzinga.com/topic/gold">a new all-time high. </a>
Meanwhile, U.S. equity futures ticked upward, signaling a potential fourth consecutive session of gains for U.S. stocks.
Economic data released Thursday showed the headline Producer Price Index (PPI) for final demand slowing to 1.7% year-over-year in August, below market expectations of 1.8% and down from July's downwardly revised 2.1%. On a monthly basis, PPI increased by 0.2%, surpassing the forecasted 0.1% and improving from the revised flat reading for July.
Core PPI, which excludes volatile food and energy prices, remained stable at 2.4% year-over-year, slightly underperforming the expected 2.5%. On a month-to-month basis, core PPI rebounded with a 0.3% rise, up from the previous month's 0.2% decline and surpassing expectations of a 0.2% increase.
In parallel, weekly initial jobless claims came in at 230,000, in line with market forecasts, signaling stable labor market conditions.
Across the Atlantic, the European Central Bank (ECB) cut its key policy rate by 25 basis points, marking the second reduction since June. The ECB justified the move as part of its efforts to moderate monetary policy. 
The ECB kept its inflation outlook steady but revised its growth forecasts downward. The central bank emphasized a data-dependent approach for future decisions, with no commitment to further rate cuts.
<h3 class="wp-block-heading">Market Reactions</h3>
Market reactions to the U.S. data were relatively muted. Rate-cut expectations for the Federal Reserve's meeting next week remained stable, with the probability of a 25-basis-point cut holding firm at 85%. 
<ul>
<li>U.S. Treasury yields softened, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) down 0.2% as yields slightly decreased.</li>
<li>The U.S. dollar, as tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), slipped 0.1%. </li>
<li>The S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), traded 0.2% higher in the premarket, as of 9:05 a.m. ET.</li>
<li>Tech stocks, followed by the Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), were 0.1% higher.</li>
<li>Small caps, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), rose 0.4%.</li>
<li>The&nbsp;Energy Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was the top-performing S&amp;P 500 sector in the premarket, up 0.6%.</li>
<li>Gold prices, monitored through the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), rose by 1.1% to 2,538 per ounce.</li>
<li>Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) rose 1.3%.</li>
</ul>
Read now: 
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40794070/exclusive-lazard-small-cap-expert-predicts-30-50-russell-2000-rally-on-the-back-of-">EXCLUSIVE: Lazard Small-Cap Expert Predicts 30%-50% Russell 2000 Rally On The Back Of Lower Interest Rates (UPDATED)</a></li>
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Photo: Shutterstock

Gold Reaches Record High As Dollar Weakens On Soft Producer Inflation Data; Wall Street Eyes Fourth Day Of Gains

U.S. inflation in August hit its lowest annual rate since February 2021 at 2.5%, falling from 2.9% in July and below the expected 2.6%, yet the underlying story <a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40812986/inflation-slows-to-2-5-in-august-lowest-rate-since-february-2021-core-index-remai">tells a more complicated tale.</a> 
Stripping out volatile food and energy prices, core inflation pressures remain stubborn at 3.2% as shelter costs surged at their fastest monthly pace since January 2024, fueling gains in the dollar and sending Treasury yields climbing.
Expectations for a hefty 50-basis-point rate cut at the Sept. 18 FOMC meeting plummeted to just 15%, down from 34% a day earlier, as per CME Group&#8217;s FedWatch tool.
Traders now increasingly anticipate a more measured 25-basis-point cut, as sticky core inflation—particularly in services—remains a key factor under close watch by the Fed.
Energy goods and services indices saw notable monthly drops, helping to ease overall price pressures. Gasoline prices fell 0.6% month-over-month in August after holding steady in July, while electricity declined 0.7% and utility bills for piped gas services dropped 1.9%.
<h2 class="wp-block-heading">Market Reactions</h2>
The mixed August inflation report and the corresponding drop in investor expectation for a larger rate cut by the Federal Reserve at the September meeting triggered the following reactions in major assets: 
<ul>
<li>The S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), opened Wednesday&#8217;s session 0.2% lower. </li>
<li>Tech stocks, followed by the Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) were flat. </li>
<li>Small caps, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), sunk 1%. </li>
<li>The&nbsp;Technology Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) was the top-performing S&amp;P 500 sector, up 0.5%. </li>
<li>The Real Estate&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) was the main laggard, down 1.6%. </li>
<li>The&nbsp;Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) rose 0.1%. </li>
<li>The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) eased 0.1% as Treasury yields rose. </li>
<li>Gold prices, monitored through the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), fell by 0.4%. </li>
<li>Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) fell 2%. </li>
</ul>
Read now: 
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<li><a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/24/09/40799429/s-p-500-off-to-a-rough-start-in-september-with-historical-trends-suggesting-more-troub">Stocks Had Worst Start To September Nearly Ever &#8211; Here&#8217;s Why</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

Currency ETFs

Dollar, Treasury Yields Rise As Small Caps Fall: August Inflation Crushes Odds Of 50-Point Fed Rate Cut

Risk aversion is shaping another tough day for Wall Street, with stocks trading in the red as investors await the presidential debate between Vice President Kamala Harris and former President Donald Trump,<a href="https://www.benzinga.com/general/politics/24/09/40797797/trump-vs-harris-debate-do-voters-want-to-hear-more-about-economy-healthcare-or-bitcoin"> scheduled at 9 p.m. ET. </a>
Energy and financial sectors are witnessing deeper losses, sharply underperforming the rest of the market. 
In the latest monthly report, OPEC revised its global oil demand growth forecasts downward, now expecting 2024 oil demand to increase by 2.03 million barrels per day (bpd), down from the previous estimate of 2.1 million bpd. For 2025, OPEC has trimmed global demand growth forecast to 1.74 million bpd, compared to the earlier projection of 1.78 million bpd.
On the regulatory front, Federal Reserve Board Vice Chair for Supervision Michael Barr announced changes to the BASEL III and GSIB (Global Systemically Important Banks) surcharge proposals, which will now increase capital requirements for the largest banks by 9%, down from the original plan of 19%. Barr also clarified that banks with assets under $250 billion would largely be exempt from these heightened requirements.
Despite this capital relief, financial stocks sank across the board. The financial sector gauge fell 2%, with JPMorgan Chase &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>) dropping 7%. The SPDR Regional Banking ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KRE#NYSE">KRE</a>) declined 2.6%, reflecting ongoing pressure even on the regional bank industry which is largely exempted from the regulation.
Elsewhere, Treasuries continued to rally. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) rose 0.6%, hitting its highest levels since late July 2023. 
The Japanese yen gained 0.5%, while both gold and Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) traded broadly flat, reflecting a mixed sentiment in alternative assets.
<h1 class="wp-block-heading">Tuesday&#8217;s Performance In Major U.S. Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>18,667.20</td>
<td>0.0%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,458.25</td>
<td>-0.2%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>40,509.61</td>
<td>-0.8%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,081.31</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:50 p.m. ET</figcaption></figure>
According to <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent091024&amp;t=be2bearmibe3na1">Benzinga Pro</a> data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&nbsp;was 0.2% lower to $545.43.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;fell 0.6% to $406.46.</li>
<li>The tech-heavy Invesco QQQ Trust Series (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) inched 0.1% higher to $454.91.</li>
<li>The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) fell 1% to $206.36.</li>
<li>The Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) outperformed, up 0.8%. The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) and the Financials Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLF#NYSE">XLF</a>) were the laggards, down 2.1% and 1.9%, respectively.</li>
</ul>
<h1 class="wp-block-heading">Tuesday&#8217;s Stock Movers</h1>
<ul>
<li>Worst-performing energy stocks were Diamondback Energy, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FANG#NYSE">FANG</a>), APA Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/APA#NYSE">APA</a>) and Exxon Mobil Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>), down 5.1%, 5% and 3.4%, respectively.</li>
<li>Hewlett Packard Enterprise Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HPE#NYSE">HPE</a>) fell over 7% as the company announced it has commenced a public offering of $1.35 billion (27 million shares) of Series C mandatory convertible preferred stock.</li>
<li>Oracle Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ORCL#NYSE">ORCL</a>) rallied 12% on the back of stronger-than-expected quarterly results. </li>
<li>Other stocks reacting to earnings were Rubrik Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RBRK#NYSE">RBRK</a>) down 5.8% and Academy Sports and Outdoors Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASO#NASDAQ">ASO</a>) up 5.68%.</li>
<li>GameStop Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GME#NYSE">GME</a>) will report earnings after the close.</li>
</ul>
Read Also:
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<li><a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/24/09/40799429/s-p-500-off-to-a-rough-start-in-september-with-historical-trends-suggesting-more-troub">Stocks Had Worst Start To September Nearly Ever &#8211; Here&#8217;s Why</a></li>
</ul>
Photo: Shutterstock

FANG

ORCL

RBRK

Select Sector SPDR-Consumer Discretionary

Wall Street Falls Ahead Of Trump-Harris Debate, Bank Stocks Tumble, Oil Plummets To $65 On Weaker Demand Outlook: What's Driving Markets Tuesday?

Exchange-traded funds (ETFs) investing in long-term U.S. Treasury bonds surged to their highest levels of the year as investors gear up for another benign <a href="https://www.benzinga.com/topic/inflation">inflation report due Wednesday.</a>
The popular iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) ended Monday's session at $99.99 per share, its highest closing price since December 2023.
The U.S. Bureau of Labor Statistics is scheduled to release the Consumer Price Index (CPI) for August on Wednesday at 8:30 a.m. ET. Economists are predicting a 0.2% month-over-month increase in both headline and core inflation, the latter of which excludes food and energy prices.
The Cleveland Fed's Inflation Nowcasting model projects similar results, with headline CPI at 2.56% year-over-year and core CPI at 3.21%.
Ed Yardeni, a well-known Wall Street veteran, said, &#8220;August&#8217;s CPI should continue to show progress in moderating inflation,&#8221; adding that the expected print would mark the lowest headline inflation since February 2021.
In a similar tone, Bank of America analysts predict that headline inflation will decline by 0.3 percentage points to 2.6% year-over-year, while core inflation is expected to hold at 3.2%.
&#8220;The August&nbsp;CPI&nbsp;report should continue the string of good news on inflation,&#8221; the bank said in a recent note. 
<h3 class="wp-block-heading">Key Data and Expectations Summary</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Metric</th>
<th>August MoM (exp.)</th>
<th>August YoY (exp.)</th>
<th>July YoY</th>
</tr>
</thead>
<tbody>
<tr>
<td>Headline CPI</td>
<td>+0.2%</td>
<td>2.6%</td>
<td>2.9%</td>
</tr>
<tr>
<td>Core CPI (ex-food and energy)</td>
<td>+0.2%</td>
<td>3.2%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
</figure>
<h3 class="wp-block-heading">Federal Reserve Rate Cut Speculation</h3>
Market participants are currently pricing in a 71% probability of a 25-basis-point rate cut at the Federal Reserve&#8217;s September meeting, and a 29% chance of a larger 50-basis-point cut.
Recent comments from Fed Governor Christopher Waller and New York Fed President John Williams indicate that a 25bp rate cut remains the baseline expectation, but larger cuts could be on the table if economic data, particularly from the labor market, worsens. 
Waller, speaking at the University of Notre Dame, noted that the Fed could act &#8220;quickly and forcefully&#8221; if needed, and signaled openness to &#8220;front-loading cuts.&#8221;
Williams emphasized that the U.S. is &#8220;moving in the right direction&#8221; on inflation but warned, &#8220;we are not there yet on achieving 2% inflation.&#8221;
Williams also highlighted that the labor market remains strong, with the unemployment rate still &#8220;relatively low by historical standards.&#8221;
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40780721/apple-stock-hits-4-week-low-after-iphone-16-launch-analyst-previously-noted-30-60-d">Apple Stock Hits 4-Week Low After iPhone 16 Launch; Analyst Previously Noted 30-60 Day Recovery Trend</a></li>
</ul>
Photo: Shutterstock

UTHY

Long-Dated Treasury ETFs Hit Yearly Highs Ahead Of August CPI Data: More 'Good News On Inflation' Expected

The U.S. Treasury market rallied sharply on Friday after August labor data showed weaker-than-expected job growth, bolstering bets on Federal Reserve <a href="https://www.benzinga.com/topic/interest-rates">interest rate cuts. </a>
The U.S. economy added 142,000 nonfarm payrolls last month, an increase from 89,000 in July but missing the expected increase to 160,000. The unemployment rate ticked down by 0.1% to 4.3% as expected, while wages displayed higher-than-forecasted growth.
Market-implied odds of a 50-basis-point rate cut in September surged to 61% as of 11:05 a.m. in New York, overtaking the 39% probability of a 25-basis-point cut, according to the CME Group&#8216;s FedWatch data.
<h3 class="wp-block-heading">September Rate-Cut Probabilities After August Jobs Data</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>September Rate Cut</td>
<td>Now&#x2A;</td>
<td>1 day ago (Sept. 5, 2024)</td>
<td>1 Week ago (Aug. 30, 2024)</td>
</tr>
<tr>
<td>50 basis points (0.5%)</td>
<td>61%</td>
<td>40%</td>
<td>30%</td>
</tr>
<tr>
<td>25 basis points (0.25%)</td>
<td>39%</td>
<td>60%</td>
<td>70%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">&#x2A; Data as of Sept. 6, 2024 11:05 a.m. ET, CME FedWatch</figcaption></figure>
Traders poured into bonds amid growing expectations of declining interest rates, driving yields sharply lower across the Treasury curve.
The policy-sensitive two-year yield dropped over 10 basis points, reaching 3.59% at 11:15 a.m. in New York, its lowest level since March 2023.
The 10-year Treasury yield fell 6 basis points to 3.67%, marking its lowest point since June 2023.
This movement has led to a positive slope in the Treasury yield curve from the 10-year onward, effectively ending the more than two-year period of yield curve inversion.
<h3 class="wp-block-heading">Chart: US Yield Curve Normalizes, Ending 2-Year Inversion</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="508" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/06112245/image-57-1024x508.png" alt="" class="wp-image-534918" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/06112245/image-57-1024x508.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/06112245/image-57-300x149.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/06112245/image-57-768x381.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/06112245/image-57-1536x762.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/09/06112245/image-57.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Market Reactions</h3>
Rate-cut expectations and falling Treasury yields triggered sharp moves across asset classes, with bonds rallying, the dollar weakening against the yen and equity markets sliding.
&#8220;No sooner than the payroll print hit, the algorithms marched into high gear, pushing Treasury yields lower as the disappointing headline number, coupled with a series of downward revisions, suggested a more dire economic backdrop perhaps requiring a heavier dose of Fed medicine on Sept. 18,&#8221; said Quincy Krosby, chief global strategist for LPL Financial.
Markets are wrestling with whether the August payroll data signals a labor market returning to pre-COVID norms or an economy losing critical momentum, Krosby said. 
<ul>
<li>Treasury-related ETFs surged, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) rising 1.1% to $100.65, on pace for its highest close since late July 2023.</li>
<li>The Japanese yen strengthened as well, with the Invesco CurrencyShares Japanese Yen Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXY#NYSE">FXY</a>) gaining over 1%, poised to close at its highest level since early January 2024.</li>
<li>Volatility spiked, as the CBOE Volatility Index (VIX) jumped 14% to 23.</li>
<li>Wall Street flipped to the red, with the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) dropping 1.5% on Friday, extending its weekly decline to 3.9%, on track for the worst weekly performance since March 2023.</li>
<li>Tech stocks were hit hardest, with the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) down 2.4%, pushing its weekly loss past 5%.</li>
<li>Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) tumbled 4%, extending its weekly loss to 14%, its worst performance in two years.</li>
</ul>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40741279/ai-tech-sector-is-not-in-a-bubble-but-diversification-out-of-magnificent-7-is-key-g">AI Tech Sector &#8216;Is Not In A Bubble,&#8217; But Diversification Out Of Magnificent 7 Is Key, Goldman Sachs Says</a></li>
</ul>
Photo via Shutterstock.

Treasury Yields Plunge, TLT ETF Tops $100, VIX Spikes As 50-Basis-Point Rate Cut Odds Soar In Response To Jobs Data

Lower-than-expected private employment growth in August triggered positive reactions Thursday in interest rate-sensitive assets like gold and the Japanese yen, while pushing Treasury yields lower as traders bolster their bets on a 50-basis-point rate cut by the <a href="https://www.benzinga.com/topic/interest-rates">Federal Reserve this month.</a>
U.S. private employers added 99,000 jobs in August, the lowest reading since January 2021 and down from a downwardly revised 111,000 in July, the ADP <a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40728795/private-employment-grows-by-99-000-in-august-sharply-misses-forecasts-of-140-000-">National Employment report revealed. </a>
The outcome fell short of the predicted 140,000, highlighting a surprising cooling in labor market conditions last month.
While weekly jobless claims were in line with expectations and offered little new insight, signs of further weakness in the labor market surfaced in the Challenger Job Report, which recorded 75,891 job cuts in August — a sharp 193% increase from the 25,885 cuts in July.
A day earlier, official statistics revealed that job openings fell to 7.673 million in July,&nbsp;the lowest in over three years, with vacancies now almost closing the gap with <a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40711148/july-job-openings-fall-to-3-year-lows-gap-with-unemployment-narrows-to-near-parit">the level of unemployment. </a>
Following the slew of Thursday&#8217;s labor market data, market-implied probabilities for a 50-basis-point cut surged to 45%, as per CME Group&#8216;s FedWatch tool, ahead of the highly anticipated official jobs report on Friday.
<h3 class="wp-block-heading">Market Reactions</h3>
Treasury yields moved lower across the board, with the policy-sensitive two-year yield down by 3 basis points to 3.72%, hitting the lowest yield in a month.
The benchmark 10-year yield dropped to 3.73%, marking its lowest level in a month. It also officially surpassed the two-year yield for the first time since July 2022, marking the end of the U.S. yield curve inversion.
In premarket trading, the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) was 0.3% higher at 9:00 a.m. in New York, after closing 1.3% higher on Wednesday.
The Japanese yen rose against the dollar, amid narrowing yield differentials between the two regions. The Invesco CurrencyShares Japanese Yen Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXY#NYSE">FXY</a>) was 0.4% higher. 
Gold prices rallied on the back of disappointing employment data, with the commodity surging to $2,515 per ounce. The SPDR Gold Trust ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) was up by 0.9%.
U.S. major indices are set to open slightly in the red, with S&amp;P 500 futures down 0.1% and Nasdaq 100 futures slipping 0.3%.
Sector-wise, technology stocks, as tracked by the Technology Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>), lagged, down 0.6%. Utilities, as tracked by the Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>), strengthened the most, up 0.7%. 
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40718185/could-august-jobs-numbers-keep-recession-fears-at-bay-this-time-is-different-analys">Could August Jobs Numbers Keep Recession Fears At Bay? &#8216;This Time Is Different,&#8217; Analyst Says</a></li>
</ul>
Illustration created using artificial intelligence via Midjourney.

Gold Rallies, Yen Surges, Treasury Yields Fall As Disappointing Payrolls Data Supports Large Rate-Cut Bets

Wall Street traded slightly higher on Wednesday, rebounding after the sharp sell-off a day earlier that saw chipmakers tumble, with NVIDIA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) shedding around $280 billion in market value — the largest single-day drop in history.
Investors processed fresh insights from July labor market statistics, which confirmed cooling conditions as job openings fell to their lowest level in three years, almost closing the <a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40711148/july-job-openings-fall-to-3-year-lows-gap-with-unemployment-narrows-to-near-parit">gap with unemployment levels.</a>
Expectations for a Federal Reserve interest rate cut improved, with market participants now assigning a 43% implied probability of a 50-basis-point cut in September, up from 38% the previous day.
Attention now shifts to key August labor data, with the ADP private payrolls report due Thursday, followed by the official jobs report on Friday.
Major equity indices were up marginally, while bonds outperformed, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) rising 0.7%, adding to Tuesday&#8217;s 1.3% gain.
Notably, chipmakers, as tracked by the iShares Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NYSE">SOXX</a>), rose 1%. 
The U.S. dollar weakened, losing 0.4% as falling Treasury yields weighed on the currency. Gold inched up 0.2%, set to break a three-day losing streak.
Oil prices continued to decline, falling 0.7% despite OPEC+ announcing a delay in its planned production increases.
Meanwhile, Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) bounced back 1.6%, trading at $58,200.
<h1 class="wp-block-heading">Wednesday&#8217;s Performance Among Major Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,162.23</td>
<td>0.4%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>19,033.77</td>
<td>0.4%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>40,985.75</td>
<td>0.1%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,535.16</td>
<td>0.1%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:35 p.m. ET</figcaption></figure>
According to <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent090424&amp;t=be2bearmibe3na1">Benzinga Pro</a> data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&nbsp;was 0.2% higher to $552.98.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;rose 0.2% to $411.03.</li>
<li>The tech-heavy Invesco QQQ Trust Series (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) rose 0.4% to $463.53.</li>
<li>The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) increase 0.4% to $214.31.</li>
<li>The Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>) outperformed, up by 0.8%, while the Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) lagged, down 0.8%.</li>
</ul>
<h1 class="wp-block-heading">Wednesday&#8217;s Stock Movers</h1>
<ul>
<li>Dollar Tree Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DLTR#NASDAQ">DLTR</a>) sunk 20% after missing quarterly earnings estimates and delivering a guidance cut.</li>
<li>Other stocks reacting to company earnings were Dicks Sporting Goods Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DKS#NYSE">DKS</a>) down 5%, Hormel Foods Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HRL#NYSE">HRL</a>) down 6.6% and Ciena Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CIEN#NYSE">CIEN</a>) up 2.2%.</li>
<li>ASML Holding N.V. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASML#NASDAQ">ASML</a>) fell 3.2% after UBS downgraded the Dutch chipmaker from Buy to Neutral, also cutting the price target. </li>
<li>Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) rose 5% on upbeat sales data in China. The China Passenger Car Association reported that sales of Tesla's China-made electric vehicles rose 17% compared to July and increased 3% year-over-year.</li>
<li>Companies reporting earnings after the close include Copart Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CPRT#NASDAQ">CPRT</a>), Hewlett Packard Enterprise Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HPE#NYSE">HPE</a>) and Caseys General Stores Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CASY#NASDAQ">CASY</a>).</li>
</ul>
Read Now:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/09/40713134/bank-of-canada-cuts-rates-again-as-inflation-labor-market-cool-canadian-stocks-rebound-loonie-st">Bank Of Canada Cuts Rates Again As Inflation, Labor Market Cool: Canadian Stocks Rebound, Loonie Strengthens</a></li>
</ul>
This image was created using artificial intelligence MidJourney.

ASML

CASY

CIEN

CPRT

DLTR

Stocks Rebound, Chipmakers Halt Bloodbath As Traders Upgrade Rate Cut Wagers; Tesla Rises, Dollar Tree In Free Fall: What's Driving Markets Wednesday?

Employment vacancies in the United States dropped sharply in July, hitting the lowest level in over three years and signaling a significant cooling <a href="https://www.benzinga.com/topic/labor-market">in the labor market.</a>
Job openings fell to 7.673 million in July, down from a downwardly revised 7.91 million in June, according to the latest official data Wednesday from the Job Openings and Labor Turnover Survey (JOLTs).
The number also came in well below market expectations of 8.1 million, adding to growing concerns about slowing employment growth.
Sectors recording the sharpest drop in job openings included:
<ul>
<li>Health care and social assistance lost 187,000 positions.</li>
<li>State and local government, excluding education, saw a reduction of 101,000 job openings.</li>
<li>Transportation, warehousing and utilities experienced a decline of 88,000 jobs.</li>
</ul>
On the other hand, professional and business services added 178,000 openings, while federal government roles grew by 28,000. The quits rate remained steady at 3.3 million in July.
Traders are now keenly focused on additional labor market data ahead, including Thursday&#8217;s ADP private payrolls report and Friday&#8217;s official August employment figures.
<h3 class="wp-block-heading">Job Vacancies Vs. Unemployment: Key Metric For Fed</h3>
The gap between job vacancies and unemployed workers narrowed significantly in July, with 7.1 million unemployed individuals now competing for 7.673 million job openings.
This brings the ratio of job vacancies to unemployed persons to just above 1-to-1, the lowest level in over three years.
This ratio is closely monitored by the Federal Reserve as an indicator of labor market tightness, with implications for wage growth and inflation. A year ago, there were 1.4 job vacancies per unemployed person, and in March 2022, that figure was close to 2, reflecting a much tighter labor market. 
<h3 class="wp-block-heading">Market Reactions</h3>
Markets had a muted reaction to the JOLTS report. The S&amp;P 500, tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), remained flat, while technology stocks, as represented by the Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), edged 0.2% lower. Semiconductor stocks, tracked by the iShares Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NYSE">SOXX</a>), also slipped by 0.4%.
In contrast, bond markets rallied as Treasury yields fell by 6-7 basis points across the curve, reflecting rising expectations of rate cuts. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) gained 0.5% on the day.
The U.S. dollar weakened, with the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) dropping 0.3%. 
Market-implied probabilities for the Federal Reserve's Sept. 18 meeting showed an almost even split between a 50-basis-point and 25-basis-point rate cut, with the chances of a deeper cut rising to 50%, up from 38% the day before, according to the CME Group&#8216;s FedWatch data.
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40708069/ai-linked-us-semiconductor-stocks-brace-for-red-wednesday-as-analyst-downgrades-dut">AI-Linked US Semiconductor Stocks Brace For Red Wednesday As Analyst Downgrades Dutch Chipmaker ASML</a></li>
</ul>
Photo via Shutterstock.

July Job Openings Fall To 3-Year Lows, Gap With Unemployment Narrows To Near Parity: Traders Raise Rate Cut Bets

Economist Peter Schiff on Tuesday warned about<a href="https://www.benzinga.com/markets/24/08/40262820/so-are-we-getting-a-recession-top-economists-and-money-managers-weigh-in-time-is-on-your-side"> a potential recession that is looming ahead, </a>accompanied by a rise in inflation &#8211; a lethal combo that can put pressure on the economy.
What Happened: Economic reports released on Tuesday showed that the U.S. manufacturing activity contracted more than expected in August and construction activity for July fell more than expected. Citing the data, Schiff said, &#8220;It&#8217;s becoming clear the #economy is entering a #recession just as #inflation is poised to turn higher.&#8221;
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">This morning has seen a trifecta of weak economic data. Aug. PMI &amp; ISM manufacturing both came out even weaker than expected, while July construction spending unexpectedly fell. It&#39;s becoming clear the <a href="https://twitter.com/hashtag/economy?src=hash&amp;ref_src=twsrc%5Etfw">#economy</a> is entering a <a href="https://twitter.com/hashtag/recession?src=hash&amp;ref_src=twsrc%5Etfw">#recession</a> just as <a href="https://twitter.com/hashtag/inflation?src=hash&amp;ref_src=twsrc%5Etfw">#inflation</a> is poised to turn higher.
&mdash; Peter Schiff (@PeterSchiff) <a href="https://twitter.com/PeterSchiff/status/1830975633104740692?ref_src=twsrc%5Etfw">September 3, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
The stock market plunged following the release of the sore data, with the decline led by growth stocks, especially the high-profile techs.
See Also:<a href="https://www.benzinga.com/money/best-depression-stocks"> Best Depression Stocks</a>
Why It&#8217;s Important: Schiff has been flagging a reversal in the direction of inflation, which has seen a downtrend following its spike to a cycle high of 9%+ in June 2022. His premise is that the weakening of the dollar on anticipated interest rate cuts by the Federal Reserve has the potential to push up import prices. This in turn can fan inflationary pressure.
The dollar index, which measures the value of the greenback against a basket of currencies has come off from its mid-April peak above the 106 level. It ended Tuesday&#8217;s session down marginally lower at 101.63.
The futures market is currently predicting a 100% probability of an interest-rate cut at the September 17-18 Federal Open Committee meeting, with the odds of a 50 basis-point cut at 43% and a 25 basis-point reduction at 57%.
But Schiff&#8217;s recession concerns may be a little farfetched. The second estimate of second-quarter GDP data released by the Bureau of Economic Analysis last week showed the <a href="https://www.benzinga.com/markets/equities/24/08/40627044/us-dollar-oil-prices-tech-stocks-rise-as-gdp-roars-by-3-in-q2-bonds-yen-slip-as-bets-for-large-r">economy expanded at a robust annualized quarter-over-quarter rate of 3%. </a>Consumer spending, which accounts for two-thirds of GDP, also rose at a 2.9% clip.
The labor market, despite the sharp downward revision in job growth, does not wave a red flag.
Those predicting doomsday would argue that most economic data are lagging indicators and may not paint an accurate picture of where the economy is headed in the near term.
All eyes are now on Friday&#8217;s nonfarm payrolls report to gauge the economy&#8217;s strength through the state of the labor market.
The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), an exchange-traded fund that is considered a recession-proof investment, ended Tuesday&#8217;s session up 1.64% at $97.75, according to<a href="https://benzinga.grsm.io/register174"> Benzinga Pro data.</a>
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/08/40505099/peter-schiff-warns-dollar-on-verge-of-a-total-collapse-as-greenback-succumbs-to-ris">Peter Schiff Warns Dollar On &#8216;Verge Of A Total Collapse&#8217; As Greenback Succumbs To Rising Rate Cut Bets: &#8216;You&#8217;re Gonna See Some Serious S&#x2A;&#x2A;t&#8217;</a></li>
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Photo by DesignRage on Shutterstock

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