Beyond the very short term, it’s all about growth
Beyond the very short term, it’s all about growth: Sevens Report Editor, Tom Essaye, Quoted in Barron’s
The Stock Market Is Rising. It’s Not All About the Size of Rate Cuts.
Data on both retail sales and U.S. industrial production were solid, but traders still see a 61% chance of a half-point rate cut tomorrow. Sevens Report Research’s Tom Essaye says investors are still optimistic about a soft landing for the economy as the Fed prepares to cut rates. He notes tech earnings recently showed signs of life after some weaker showings in August.
Though you can expect some fireworks tomorrow as traders react to the rate decision and the forecasts for future cuts from central bank officials, Essaye argues economic data and earnings will be the market’s main driver ahead.
“Beyond the very short term, it’s all about growth,” Essaye says. “This Fed rate cut is honestly, other than from a sentiment standpoint, largely inconsequential, because whether or not the economy slows a lot between now and year end, this rate cut is not going to impact that; they take too long to filter through the economy.”
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