BMY Wealth Management Group’s Post

Market volatility continues to be top-of-mind for investors, particularly as the Fed prepares for its first rate cut in September. Our latest market commentary from Head of Investment Strategy, Min Zhang, CFA details how stocks and bonds have rebounded, what’s expected from the Fed, and how we’re helping clients stay prepared: https://bit.ly/3B1pGrd.

If all goes as the markets expect on Wednesday, the Federal Reserve will lower interest rates for the first time since the onset of the covid-19 pandemic. Though the move is widely anticipated, its effects will likely play out across markets for some time. With inflationary pressures finally easing from their recent 40-year highs, it's all but certain that the Fed will reduce its target rate from its current range of between 5.25% and 5.50%. What's less clear is how deep that first cut will be. Investors are divided as to whether the Fed will ease policy by 0.50%, which would be a more aggressive move, or whether it will opt for a more cautious 0.25% cut. In recent days, investor uncertainty about the extent of the Fed's move has grown, with the bond market showing wide swings back and forth in expectations. Sarah Hansen writing for Morningstar answers the question: "What Happens to Stocks When the Fed Starts Cutting Rates?" in her recent post. #stocks #markets #inflation #investing #fed

Some weeks are more consequential than others in shaping the market narrative, and last week was one of them. The Fed delivered on what markets have been hoping for and anxiously anticipating over the past two years. Interest rates were cut by a larger-than-typical 0.5%, signaling a critical turning point in the monetary-policy cycle. In response, stocks set new record highs, and the S&P 500 extended its year-date gains to near 20%, as investors embraced and applauded the move. Read more in our latest Weekly Market Wrap as we offer five key takes on what last week's announcement means for the economy and markets.

Some weeks are more consequential than others in shaping the market narrative, and last week was one of them. The Fed delivered on what markets have been hoping for and cut interest rates by a larger-than-typical 0.5%, signaling a critical turning point in the monetary-policy cycle. In response, stocks set new record highs, and the S&P 500 extended its year-date gains to near 20%. We offer five key takes on what last week's announcement means for the economy and markets.

Some weeks are more consequential than others in shaping the market narrative, and last week was one of them. The Fed delivered on what markets have been hoping for and anxiously anticipating over the past two years. Interest rates were cut by a larger-than-typical 0.5%, signaling a critical turning point in the monetary-policy cycle. In response, stocks set new record highs, and the S&P 500 extended its year-date gains to near 20%, as investors embraced and applauded the move. We offer five key takes on what last week's announcement means for the economy and markets.

The stock market's six-week streak of gains was interrupted last week, as rising bond yields started to attract investors' attention. Just over a month has passed since the Fed kicked off a new easing cycle, cutting its policy rate by a larger-than-typical half a percentage point. Yet, during that time, both 2- and 10-year Treasury yields have climbed, challenging the prevailing narrative. Could the rally in rates pose a serious threat to the stock market's momentum?

🔮 Just came across an insightful article on Morningstar discussing the potential effects of the Fed's upcoming interest rate cuts, and here’s a brief recap of it : History shows mixed outcomes: In 1995, markets soared by 21% after rate cuts, but in 2001, stocks dropped by 10%. So, what can we expect this time? 📈 Tech stocks are leading the charge post-pandemic, but the real driver could be earnings growth. As Jeff Buchbinder from LPL Financial says, “Every cycle is different.” Sectors like financials, real estate, and small caps may be positioned to benefit from the upcoming rate cuts, driven by earnings growth. ⚖️ Volatility, however, remains a big question. Can the Fed successfully navigate this delicate balance? 💬 What’s your view? Will the rate cut spark a market rally, or are we heading into choppy waters?

If all goes as the markets expect on Wednesday, the Federal Reserve will lower interest rates for the first time since the onset of the covid-19 pandemic. Though the move is widely anticipated, its effects will likely play out across markets for some time. With inflationary pressures finally easing from their recent 40-year highs, it's all but certain that the Fed will reduce its target rate from its current range of between 5.25% and 5.50%. What's less clear is how deep that first cut will be. Investors are divided as to whether the Fed will ease policy by 0.50%, which would be a more aggressive move, or whether it will opt for a more cautious 0.25% cut. In recent days, investor uncertainty about the extent of the Fed's move has grown, with the bond market showing wide swings back and forth in expectations. Sarah Hansen writing for Morningstar answers the question: "What Happens to Stocks When the Fed Starts Cutting Rates?" in her recent post. #stocks #markets #inflation #investing #fed

The bear 🐻 view for 2025 2025 is shaping up to be a pivotal year, with optimism running high on one hand and caution steadily creeping in on the other. The bullish case hinges on pro-growth policies—tax cuts, deregulation, and favorable moves at the Treasury promising a boost to small and medium-sized businesses. Add to that the Federal Reserve’s ongoing rate-cut cycle, and some are already envisioning SPX surge past 7,000. But here’s the thing: cracks are starting to show. Inflation risks, recession signals, and overstretched market valuations paint a very different picture. Inflationary pressures, fueled by policy decisions and geopolitical risks, could throw a wrench in the Fed’s plans, forcing them to pause rate cuts. Historically, recessions don’t begin during rate hikes—they begin during rate cuts. The warning signs are there: a possible yield curve inversion, equity sell-offs, and earnings compression could set the stage for a hard landing. Markets are already looking expensive, with P/E ratios approaching 2021 levels and heavy reliance on just a handful of dominant companies. When sentiment leans too bullish, the risk of correction grows, and the Mag7 stocks could be the tipping point. Even a small correction in this group could ripple through the entire market.

The stock market's six-week streak of gains was interrupted last week, as rising bond yields started to attract investors' attention. Just over a month has passed since the Fed kicked off a new easing cycle, cutting its policy rate by a larger-than-typical half a percentage point. Yet, during that time, both 2- and 10-year Treasury yields have climbed, challenging the prevailing narrative. Could the rally in rates pose a serious threat to the stock market's momentum? To answer this, we examine the forces driving the recent rise in bond yields and explore the potential for further increases.