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David Wagner says profits matter more to equities than yields right now, and he's not worried about the absolute level of rates. He argues against moving into fixed income, preferring to over-own risk assets like hyperscalers and high-quality small caps. Wagner sees the debt-to-GDP ratio improving and calls the economy a "rainbow" worth embracing despite the rain.
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David Miller stays bullish on equities despite rising rates, pointing to 5%+ GDP growth and mid-teens earnings growth as reasons to prefer stocks over bonds. He calls the "SaaS apocalypse" narrative silly, noting companies like Intuit (INTU), Wix (WIX), and HubSpot (HUBS) have high margins, strong free cash flow, and big buybacks. Miller also remains long-term bullish on gold and favors insider buying as a signal of confidence.
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The Trump administration's attempts to lower taxes on diesel is offering relief for equities as crude oil and other energy-tied trades move lower. Kevin Hincks talks about the direction he sees the energy trade moving toward as Fed speakers discuss the state of the economy and interest rates. Another energy mover happening Tuesday morning: Constellation Energy (CEG) and Alphabet (GOOGL) signing a 20-year nuclear power deal.
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Nvidia (NVDA) reached a new record high on Monday with Tuesday's premarket trading action indicating an even higher open. Tom White shows how the stock broke out from key support levels as momentum on the RSI nears overbought territory. He turns to an example options trade for the Mag 7 giant.
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Options involve risks and are not suitable for all investors. Before trading, read the Options Disclosure Document. http://bit.ly/2v9tH6D
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The Fed has a real dual mandate problem, according to David Busch. Softening in the labor market through the September jobs report, paired with a slowdown in hiring, lead him to believe the FOMC will pause in October with a possible hike in December. On the outlook for Treasury yields, David doesn't see demand sustaining for higher rates long-term.
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Joe Schmitz talks about whether you should do a Roth conversion if you're nearing retirement. As he explains, "it's not a strategy for everyone," outlining the reasons upcoming retirees should consider changing their investment plan. Joe then explains his end-of-year market outlook and how you can protect your portfolio.
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McDonald's (MCD) is struggling to rebound off 4-year lows, with pressure being added onto the stock with a price target cut from Keybanc. However, as Charles Schwab's Ben Watson points out, the 5-day chart shows a sharp rebound off Monday's new 52-week low. He also shows how McDonald's is becoming an "anti-yield" stock.
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Futures indicate the S&P 500 (SPX) is knocking on the door of a new all-time high, though Kevin Green says there are key technicals to watch if the index breaks out. A downtick in crude oil prices is another key factor backing bullish sentiment Tuesday morning. KG walks investors through the key levels to watch in both as investors prepare for a new earnings season. In equities, AMD Inc. (AMD) surged after comments from the CEO point to "very high" demand. Constellation Energy (CEG) shares rallied ahead of the opening bell after penning a deal with Alphabet (GOOGL) to offer 890 megawatts of nuclear power.
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Microsoft (MSFT) tapped 11-months highs after securing an upgrade from Melius Research. Cerebras (CBRS) rallied after OpenAI CEO Sam Altman's partnership comments. A pair of acquisitions led to clear outperformers and underperformers in the S&P 500 (SPX). Marley Kayden carries investors through the top stories of the day.
======== Schwab Network ========
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On a day where U.S. ISM services took a turn downward, General Motors (GM) announced plans expand its reach in the hybrid car market. On international headlines, Brazil's stock market saw a rally following election results in the country. Sam Vadas and Marley Kayden explain what makes their top takeaways on Monday's session significant for investors.
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