What am I Investing During Rate Cut in Sept?

Good Morning.

Fed is almost 100% going to cut rates! This week is gonna be huge! Nvidia's earnings report on Wednesday is the main event. Investors are eager to see if AI demand has changed and get a feel for the overall tech outlook.

What to Invest in When Fed Cut Rates?

There are a lot of rumours (some people call them news) that rate cut is bad for the market.

As one of my ex-bosses used to say, “In God We Trust, The Rest Bring Data”.

So let’s take look at past data. In a research by Bloomberg, it shows that in the last 14 rate cuts, only 2 resulted in negative returns after the rate cut started.

The 2 periods of negative returns happened where the following 12-month, a recession kicks in.

So will there be a recession? There are certain differences between this rate cut and past rate cuts. Fed is not cutting rates because the economy is weak, it is because inflation is cooling off and they no longer needs to be restrictive. We are seeing good consumer spending and corporate earnings.

My view is that the chances of a recession is low. But should it happen, my Stock Market Community and I will be ready for it!

And for anyone thinking of joining SMG, reminder that the Special birthday offer just for you is expiring TODAY!

🎁 Use code BIRTHDAYOFF to get $100 off your SMG subscription! 🎁 

Don’t miss out

I just shared my top strategy for the current market in my SMG community, where I went into the details why I did the following investment! Check it out for my real-time updates and analysis!

SPONSOR
If You Like To Have More Investing Nuggets

Get value stock insights free.

PayPal, Disney, and Nike recently dropped 50-80%.

• Are they undervalued?

• Can they recover?

• Read Value Investor Daily to find out.

We read hundreds of value stock ideas daily and send you the best.

Subscribe with one click.

Why is Fed Cutting Rates?

Fed Chair Jerome Powell has finally acknowledged that rate cuts are on the horizon, sparking a brief surge in the market last week.

While Powell claims to be data-driven, that's about as reliable as a snooze button on my alarm.

What you should be paying attention to now are two things: a) any hints in his language about timing, and b) the US 10-year yield, which is currently dropping.

The message is clear.

Powell needs to talk up the idea of a rate cut just enough to keep up appearances while avoiding any suggestion that he's politically motivated. I've said before that I don't think he'll make any moves until after the elections, and I still believe that's the case.

As for the 10-year yield, remember it's not the yield itself that matters.

It's the perception of risk that the yield represents. Right now, those are down, which means short-term money is seeking safety (since major traders are buying bonds), but in the long run, they'll shift the other way as investors step in. And where would the money flow is where you should be investing.

FUN
Do You Need More Investing Tools?

Alright! This should get you ready for the markets this week!

May Your Profits Grow!

Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.