Updated quantity ratings on 107 stocks

The big day is almost here. The Federal Reserve’s September Federal Open Market Committee (FOMC) meeting is officially underway. And tomorrow, we should finally have an answer to the question on everyone’s mind…

How Much Will the Federal Reserve Cut Key Interest Rates?

Interestingly, there is now a growing consensus that the Fed should cut rates by 0.5% instead of 0.25%.

So, in today’s 360 SquareI will address what may happen with the Fed announcement tomorrow. I should also note that we won’t see much action in the markets until after the Fed meeting. So, I’ll also share with you how you can best position yourself to profit from the Fed’s announcement.

How big will the Fed cut tomorrow?

On Friday, the probability of a 0.5% rate cut rose to 50% after falling to a 13% chance midweek. Then yesterday, the probability of a 0.5% rate cut rose to 57%, with the probability of a rate cut of just 0.25% falling to 43%.

And following this morning’s retail sales report, the market has now pegged a 63% chance the Fed will cut rates by 0.5%, according to CME’s FedWatch tool.

Source: CME FedWatch tool

To be honest with you, the retail sales report this morning was mixed. Retail sales rose 0.1 percent in August, beating economists’ expectations for a 0.2 percent decline. July retail sales were also revised up to a 1.1 percent increase, compared to the 1 percent increase previously reported. August retail sales, which exclude cars and gasoline, rose 0.2 percent, missing estimates for a 0.3 percent increase.

So when you factor in the latest retail sales data, the fact that inflation continues to moderate and fall closer to the Fed’s 2% target, and that the labor market is weakening, there is a strong likelihood that the Fed will be able to cut rates by 0.5% tomorrow. .

Now, if the Fed cuts key interest rates by 0.5%, then an explanation will be required. What is certain is that the FOMC does not want to give the impression that it has panicked and needs to catch up with market rates.

Remember, Treasury yields have fallen following recent economic data, including last week’s reports on wholesale consumption and inflation. The 10-year Treasury is at about 3.65% today, while the two-year Treasury yield is around 3.59%. That compares with a 10-year Treasury yield of 4.7 percent and a two-year Treasury yield of 5.05 percent at the end of April.

While Treasury yields have fallen steadily in recent months, the Fed stood firm in June, keeping key interest rates between 5.25% and 5.5%. Clearly, there is a big difference between the federal funds rate and market rates – and the Fed usually doesn’t fight market rates. So that’s another reason Fed officials and market pundits called for a bigger rate cut on Wednesday.

Whatever happens, I look forward to seeing a more dovish tone in the Fed’s official statement as well as Fed Chairman Jerome Powell’s press conference. I’ll also be interested to see the new dot plot, which polls Fed members on their outlook for rates going forward. I think he is likely to forecast two more rate cuts this year – in November and December – and three more in 2025.

This week’s ratings are changing

But you don’t have to listen to me. We’ll have the report pretty soon tomorrow and we’ll know for sure.

Awaiting the Fed’s decision tomorrow, the stock market is trading relatively flat. But I expect a relief rally after tomorrow’s Fed announcement, provided the news is mainstream and suggests further rate cuts are on the way.

Meanwhile, to help you prepare for what could be a big move in the market after the Fed announcement, we’ve taken a fresh look at the latest institutional buying pressure and the financial health of each company. I decided to revise my Portfolio Grader recommendation for 88 large chips. Of these 88 stocks…

• Eleven stocks were upgraded from Buy (B rating) to Strong Buy (A rating).
• Seventeen stocks were upgraded from a Hold (C rating) to a Buy (B rating).
• Eighteen stocks were upgraded from a sell (D rating) to a hold.
• Nineteen stocks were downgraded from Buy to Hold.
• Thirteen stocks were downgraded from a hold to a sell.
• And four stocks were downgraded from a sell to a strong sell (F rating).

We’ve listed the top 10 stocks rated as Buys below, but you can find a more comprehensive list – including all fundamental and quantitative classes of all 107 stocks – here. Chances are you have at least one of these stocks in your portfolio, so you may want to whittle down this list and adjust accordingly.

Preparing for What’s Next

What’s certain is that we probably won’t see any big market moves until the Fed’s announcement. And this gives you the opportunity to prepare your portfolio for what’s to come…

The truth is, folks, I predict that when the Fed starts cutting rates, it will mark the end of the $8.8 trillion “cash bubble.” And all that money just sitting on the sidelines will be released into the market.

One thing I know after 40 years in the markets is that money goes where it is treated best… That means fundamentally superior stocks should benefit the most.

With the stock market likely to begin to regain momentum in a few weeks, right now is a great opportunity to pick up shares of fundamentally superior stocks at deep discounts.

Specifically, I’ve identified five stocks in one of the market’s most popular sectors that remind me of the FAANG stocks of the Internet boom.

To access my full briefing on this cash bubble – and how you can take advantage – go here now.

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Sincerely,

Louis Navellier

Editor, 360 Square

The Publisher hereby discloses that, as of the date of this e-mail, the Publisher owns, directly or indirectly, the following securities that are the subject of commentary, analysis, opinions, advice or recommendations in, or are otherwise referred to in, the essay presented above down:

Cooper Companies, Inc. (COO)