I like this little article. Fed Cuts! Market (Rightfully) Yawns Fed rate moves don’t carry the power so many think—especially when nearly everyone expects them. https://www.fisherinvestments.com/en-us/insights/market-commentary/fed-cuts-market-rightfully-yawns (BOLD is my opinion OR what I consider important content) "They did it! As near-universally expected, the Fed just cut its fed-funds target range by a quarter percentage point, bringing it down to 4.00% - 4.25%, the fourth cut in this “cycle” after a nine month pause. Most observers either highlighted the oddity of this meeting’s particulars or saw the move as critical for stocks and the US economy. Folks, some news: While this cut is fine and dandy—we don’t object to it at all—the effects are far smaller than most tout. Let us explain. Yes, this latest cut does bring the full cycle’s (if something on hold for nine months can still be considered a cycle) to 1.25 percentage points. And traders are penciling in two more by yearend. Maybe those happen! Maybe there will be more! The Fed’s generally useless dot plot of future rates matches traders’ expectations for two more 2025 cuts, and the median look-ahead is for a couple more by yearend 2026. But today’s rates are already where the Fed projected in June and December, according to the central tendency in those forecasts. And consider 2022: Fed forward guidance early that year argued for no hikes and looking through “transitory” inflation pressures. As you likely know, that misguidance didn’t hold—the Fed embarked on a steep hike cycle soon thereafter. So you can’t really know what the Fed will do from here. They are people, swayed by biased interpretations of incoming data. And that was true well before the odd optics around this meeting emerged, which saw one Fed Governor (Lisa Cook) attend a meeting the Trump administration tried to bar her from while the president’s temporary nominee (Stephen Miran) rushed to join via appointment to an unrelated opening. Pundits were already handwringing over dissention and a lack of uniformity at July’s meeting. But is groupthink really preferable to a diversity of opinions? We don’t think so. And, unsurprisingly, there was less dissent at this meeting than July’s—one board member (Miran) wanted to cut by 0.50 percentage point. That was it. Still, some claim the present scenario is more than mere differences in opinions, given President Trump’s vocal criticism of Fed Chair Jerome Powell and his effort to fire Cook for cause, noting this risks the Fed’s independence. We won’t rehash all our thoughts on that here—and there is no need to today. There is little reason to see a 0.25 percentage point cut through a political lens. The Fed had ample reasons to cut rates today. One, the Humphrey-Hawkins Act slaps a dual mandate on the Fed to base policy on the sketchy guidelines of maximum employment and price stability. With the targeted inflation rate (the headline personal consumption expenditures price index) running at 2.6% y/y in July and in a range of 2.2% to 2.6% since March, the inflation war is over. Yes, this is above the 2% target. But no central bank has ever proven the ability to fine tune anything important to the decimal point. While prices have cooled, hiring has too. So on that basis, a cut could be justified under the Fed’s mandate. Two, a cut could bullishly widen the US and global yield curve spreads—the gap between short and long rates. Since banks borrow short term to fund longer-term loans, a wider spread means more profitable lending. That motivates banks to extend credit, juicing growth. This is why steep curves are traditionally seen as bullish indicators of future economic expansion. The US curve spread was miniscule before the Fed’s cut. The ECB’s eight rate cuts in Europe have steepened its curve notably, with spreads far wider than America’s. Fed cuts could push it in that direction some. So a cut or three could be fine and good. But they aren’t needed either. There is little sign in data of contraction underway. The much-ballyhooed revision to jobs data still shows positive payroll growth, even if the average has slowed. August retail and industrial data both proved resilient, despite tariffs taking hold that month. The month’s Institute for Supply Management (ISM) Services purchasing managers’ index (PMI) hit 55—well above the 50 mark that divides expansion from contraction—with forward-looking new orders at 56.[ii] ISM’s Manufacturing PMI did contract in August, at 48.7.[iii] But this merely extends a long-running trend. More notable: Manufacturing new orders improved to 51.4—the first expansionary read since January and one of only five in the last two years.[iv] Only time will tell if this single read is a trend, but there is little to suggest big, new trouble here—nothing that screams America needs lower policy rates to stave off calamity. Those cuts also aren’t a gamechanger for stocks. As we wrote in August, rate cuts rarely shift the direction of markets materially going forward, with the prevailing trend largely continuing. In 2008, the Fed’s vast rate cuts and quantitative easing didn’t end the financial crisis-driven bear market. In 2001, rate cuts did nothing to stop a bear market that ran through October 2002. The same holds for hikes. Nor do these rate cuts automatically mean you are likely to see lower mortgage rates or long bond yields. That could happen but it isn’t assured. The Fed only sets short rates, while the market sets longer-term ones. Consider: When the Fed cut by 50 basis points last September, 10- and 30-year Treasury yields were at 3.70% and 4.03%, respectively.[v] Now the two are at 4.04% and 4.65%—higher, despite more Fed cuts in the interim.[vi] The same has happened in Europe, where eight ECB cuts haven’t meant lower long yields. Perhaps long rates do follow short ones down. But, again, it isn’t assured. For all the drama in headlines before the announcement, the S&P 500 barely budged, finishing the day down -0.1%, paralleling a minor dip earlier in the trading day.[vii] That teensy reaction seems apropos to us. Markets, after all, pre-price widely expected events—and this cut was just that. But even looking forward, we think it would be a mistake to hinge your market views on whatever the Fed does. Always remember: Interest rates matter, but they aren’t all-important." MY COMMENT At this point....I dont care about the FED. They overplayed their hand with all their constant talking and BS. they wore everyone out and at this point I consider them irrelevant. We have seen over the past nine months that their ridiculous refusal to cut rates had basically ZERO impact on stocks or investors. Their 2% inflation target is a big JOKE.....as are they. Who needs them. The markets certainly dont.
Can anyone predict the future of the markets accurately? Probably not....but here is a take on 2026. A key business story to watch in 2026 Plus a charted review of the macro crosscurrents https://www.tker.co/p/profit-margins-expected-to-expand-2026 (BOLD is my opinion OR what I consider important content) "With almost three quarters of 2025 in the rear-view mirror, market participants are increasingly shifting their focus toward 2026. “As we met with a variety of US equity investors last week — ranging from hedge funds to high-net-worth retail, from high-level macro investors to stock pickers, and everything in between — it became clear to us that it’s time to start talking more about 2026,” RBC Capital Markets’ Lori Calvasina said Monday. She preliminarily sees the S&P 500 ending 2026 at 7,100 as earnings per share (EPS) grow about 10% to $297. (For more on how to think about year-end targets, read:A better way of thinking about Wall Street's year-end price targets ️) Her projections are derived from a blend of five models that factor in almost every imaginable macro variable. But one assumption caught my attention. Analysts expect fatter profit margins “We are baking in some margin expansion for 2026,” she wrote. On the subject of profit margins, she added, “One of our biggest takeaways from 2Q25 reporting season is that companies are laser focused on mitigation strategies around tariffs.“ This is in line with Morgan Stanley’s analysis of Q2 earnings calls: “Unsurprisingly, we saw a significant increase in the number of mentions of tariff mitigation strategies last quarter with many companies citing multiple strategies.“ Executives are focused on mitigating costs associated with new tariffs. (Source: Morgan Stanley via TKer) And it’s not just tariff mitigation that could bolster profit margins in the quarters to come. “Drivers for margin strength include operating leverage, continued efficiency gains (AI and others), slowing employment inflation in many labor-intensive sectors, and the potential for cost-cutting from deregulation,” BofA’s Savita Subramanian wrote Wednesday. While margin expansion in 2025 has mostly been driven by big tech companies, that growth is expected to broaden out across industries in 2026. Profit margins are expected to expand in more industries next year. (Source: BofA) Subramanian expects EPS to grow about 10% to $298 in 2026 as net margins increase by 40 basis points to 13.2%. She has yet to offer a 2026 price target for the S&P 500. Goldman Sachs also has yet to publish forecasts for 2026. (These calls typically come later in Q4.) However, they have been discussing the prospects for growth in profit margins. “[A] cooling labor market is a tailwind to corporate profits, all else equal,” Goldman Sachs’ David Kostin wrote in a Sept. 12 note. Labor represents a significant cost across industries. (Source: Goldman Sachs) “Profit margins typically expand when companies can raise prices more quickly than materials input and labor costs,” Kostin said. “Our economists expect the U.S. economy will continue to expand in 2H 2025 and 2026, but slow job growth will keep a lid on wage growth.” Indeed, with the economy cooling, workers don’t have as much leverage as they used to to push for a raise. Surprising us every year since 2021 In what’s arguably been the most surprising business development of the current economic cycle, profit margins remained historically high throughout 2021, 2022, 2023, 2024, and, so far, 2025. And now analysts expect margins to expand in 2026 (and 2027!). Profit margins remain historically high. (Source: Goldman Sachs) Whether it was supply chain disruptions, hot inflation, tight monetary policy, or the threat of higher tariffs, Corporate America has successfully navigated the treacherous cost environment to maintain historically high profit margins and generate record-high earnings. Can this trend really persist? We’ll see. But for now, the case for high profit margins looks strong, supported by recent years of success." MY COMMENT Sounds good to me. I expect to see another good year with a continuation of the BULL MARKET in 2026. In fact I expect to see business have an even better year in 2026 than they did in 2025.....as we will be substantially free from the tariff drama. But....talking about 2026 is still....short term talk. And as short term talk...it is particularly opaque and subject to all the things that cause short term risk. SO.....my focus continues to be on the LONG TERM.
Here is our little MILD mixed market so far today. Dow, S&P 500, Nasdaq pull back from records as gold powers to fresh high https://finance.yahoo.com/news/live...s-as-gold-powers-to-fresh-high-234423032.html (BOLD is my opinion OR what I consider important content) "US stocks retreated on Monday as Wall Street looked ahead to a parade of Federal Reserve speakers and a key inflation print for clues to the chances of further US interest-rate cuts. The Dow Jones Industrial Average (^DJI) slipped roughly 0.4%, while the S&P 500 (^GSPC) nudged down 0.2%. The tech-heavy Nasdaq Composite (^IXIC) was about 0.1% lower, on the heels of a strong week for stocks as investors welcomed the Fed’s return to easing. Gold (GC=F) rose to a fresh all-time high on Monday, topping $3,750 amid bets the Fed will lower rates twice more before the end of 2025. But bitcoin (BTC-USD) and other crypto tokens sank as traders liquidated over $1.5 billion in bullish wagers. Markets are waiting for Friday's fresh reading on the Fed’s preferred inflation gauge, the personal consumption expenditures price index, to test those wagers. A weak print is likely to lift the odds of another quarter-point cut in October. Wall Street expects PCE in September to show price pressures are persisting but remain tame enough to keep the Fed on track. Meanwhile, investors will listen out for any other hints from a packed schedule of Fed speakers in coming days, including Chair Jerome Powell and President Trump-backed Stephen Miran. The newly installed Fed governor has promised to give details on his policy views at his appearance on Monday in New York, while Powell is slated to speak on Tuesday. Markets were watching for any fallout from Trump's latest immigration crackdown. On Friday, his administration said US companies will face a $100,000 fee for H1-B work visas, prompting the likes of Microsoft (MSFT) and Goldman Sachs (GS) to send urgent emails warning employees. Shares of megacap techs were mixed in early trading. In earnings reports due later, eyes will be on Micron Technology (MU) for updates on AI-driven demand and on Costco (COST) results for a window into consumer spending." MY COMMENT My COSTCO will finally report earnings this Thursday. I dont know if they are the last to report as part of the last earnings reporting period or if they are an early report for the next reporting period that will start in about a month. The FED speakers......JUST SHUT UP AND GO AWAY. These ego maniacs just can not shut up. People are so sick of them and their constant attention seeking. All in all....not much going on today or this week.....as we wait for the next earnings to come in starting in about 3-4 weeks.
Good for APPLE.....I like this as a shareholder....but dont expect much immediate impact. Apple takes control of all core chips in iPhone Air with new architecture to prioritize AI https://www.cnbc.com/2025/09/21/app...e-iphone-chips-prioritizing-ai-workloads.html (BOLD is my opinion OR what I consider important content) "iPhone Air is the big newcomer among Apple’s latest lineup that went on sale Friday, but inside the slim phone’s raised plateau is another new piece of hardware that signals a renewed focus on artificial intelligence. Apple’s custom A19 Pro chip introduces a major architecture change, with neural accelerators added to each GPU core to increase compute power. Apple also debuted its first ever wireless chip for iPhone, the N1, and a second generation of its iPhone modem, the C1X. It’s a move analysts say gives Apple control of all the core chips in its phones. “That’s where the magic is. When we have control, we are able to do things beyond what we can do by buying a merchant silicon part,” said Tim Millet, Apple vice president of platform architecture. He sat down with CNBC at Apple Park in September for the first U.S. interview about the new chips. Until now, Broadcom was the main provider of wireless and bluetooth chips for iPhones, although Apple has made networking chips for the AirPods and Apple Watch for nearly a decade. Apple’s N1 is in the entire iPhone 17 lineup and the iPhone Air. Arun Mathias, Apple vice president of wireless software technologies and ecosystems, gave CNBC an example of the N1′s improved Wi-Fi functionality. “One of the things people may not realize is that your Wi-Fi access points actually contribute to your device’s awareness of location, so you don’t need to use GPS, which actually costs more from a power perspective,” Mathias said. “By being able to do this more seamlessly in the background, not needing to wake up the application processor as much, we can do that significantly more efficiently.” For iPhone modems, Qualcomm has been the sole provider since 2020. That changed in February when Apple unveiled the C1 in the iPhone 16e. It’s a plan first set in motion in 2019, with Apple’s purchase of Intel’s modem business for $1 billion. Qualcomm has long warned investors of the coming change. Qualcomm modems remain in the iPhone 17, 17 Pro and 17 Pro Max, but Apple’s C1X is in the iPhone Air. “It may not be as good as Qualcomm’s yet, in terms of just overall throughput and performance, but they can control it and they can make it run at lower power. So you’re going to get better battery life,” said Ben Bajarin, CEO of Creative Strategies, a technology research and consulting firm. He expects Apple to “completely phase out” Qualcomm in the “next couple of years.” Apple’s Mathias said the C1X is “up to twice as fast” as the C1 and “uses 30% less energy” than the Qualcomm modem in the iPhone 16 Pro. Neither Qualcomm or Broadcom saw much market impact following Apple’s announcement, and both companies will maintain licensing deals with Apple for certain core technologies. Apple’s three new chips come amid increasing pressure from Wall Street about the company’s AI strategy. “They probably won’t ever have their own Apple model like Google or OpenAI,” Bajarin said. “They’re still going to run those services on iPhone, right? They want the iPhone to be the best place for developers to run their AI.” Apple has been making its own system on a chip, or SoC, since the A series launched with the iPhone 4 in 2010. The latest generation A19 Pro has a new chip architecture that prioritizes AI workloads, adding neural accelerators to the GPU cores. “We are building the best on-device AI capability that anyone else has,” Millet told CNBC. “Right now we are focused on making sure that these phones that we’re shipping today, or shipping soon, will be capable of all the important on-device AI workloads that are coming.” Privacy is a major reason Apple is prioritizing on-device AI, but Millet said there’s another reason, too. “It is efficient for us. It is responsive. We know that we are much more in control over the experience,” he said. One “built-in AI” feature Millet highlighted is the new front camera that uses AI to detect a new face and automatically switches to taking a horizontal photo. “It’s leveraging a full complement of almost all the capabilities in the A19 Pro,” Millet said. Apple’s original AI hardware, its Neural Engine, was first unveiled back in 2017. It was barely mentioned at the launch. Instead, it’s all about adding compute power to the GPUs. “The integration of the neural processing is reaching MacBook Pro class performance inside an iPhone,” Millet said. “It’s a big, big step forward in ML compute. And so when you look inside the Neural Engine, for example, you have a lot of dense matrix math. We didn’t have that capability in our GPU. But now we do with A19 Pro.” Bajarin told CNBC that Apple’s neural accelerators may work similarly to the tensor cores on Nvidia’s AI chips, such as the H100. “We’re integrating neural processing in a way that allows someone who’s writing a program to one of those small processors, extending the instruction set so they have a new class of computer that they have access to right there, and they can switch back and forth between 3D-rendering instructions and neural-processing instructions, all seamlessly inside the same microprogram,” Millet said. Apple’s previous generation A19 SoC is in the base model iPhone 17, while the A19 Pro is in the iPhone Air, iPhone 17 Pro and 17 Pro Max. Following overheating issues in the iPhone 15, a new “vapor chamber” in the Pro models keeps the custom chips cool. “It’s actually positioned in concert with where the system on a chip, the A19 Pro is positioned,” said Kaiann Drance, Apple’s vice president of worldwide iPhone product marketing. “We think about how that all goes together, including with that forged unibody aluminum design, which is incredibly thermally conductive so that we can effectively dissipate heat with the vapor chamber, with where it’s positioned with our chip. And it’s even laser welded into it, which creates a metallic bond which also helps dissipate heat.” Apple still relies on others for smaller components, like Samsung for memory and Texas Instruments for analog chips. All bigger core chips, however, may be Apple-designed in every iPhone as soon as next year, according to Bajarin. “We expect that there would be modems coming to Mac. We would expect there’s modems coming to iPad. There’s probably N variants of the networking chip coming to Mac,” Bajarin said. “I think over the course of the next few years, it will be on all of the portfolio.” When CNBC asked Apple’s Millet if neural accelerators will be in the GPU cores of M5, the next anticipated SoC for Mac, he said, “We have a unified approach to architecture.” The iPhone maker plans to manufacture at least some of its custom chips in the U.S., at facilities like Taiwan Semiconductor Manufacturing Company’s new campus in Arizona, where CNBC got a tour of the first completed fab. Apple’s A19 Pro is made at the leading edge of TSMC’s 3-nanometer node. While TSMC is working toward 3nm production in Arizona by 2028, it’s not there yet. “If you need to be on the leading edge, it’s going to be Taiwan for the time being,” Bajarin said. In August, Trump announced a 100% tariff on chips from companies not making domestically. That same day, Apple increased its U.S. spending commitment to $600 billion over the next four years. CEO Tim Cook said part of that will go toward creating an “end-to-end silicon supply chain right here in America.” “There’s really a question of what part of tariffs impact the silicon supply chain,” Bajarin said. “This is obviously why Apple and Tim Cook are on their mission and out there talking about investing in America.” As part of that plan, Bajain said Apple could give struggling U.S. chipmaker Intel “serious consideration if 14A really does deliver on all of its promises.” Although, he added, it’s “going to be awhile” before Intel “becomes a viable option.” For now, Apple is committed to making chips at TSMC Arizona. “We are super excited about TSMC’s push into U.S. manufacturing. Obviously, it will help us from a time zone perspective, and we also appreciate that the diversity of the supply is also really important,” Millet said. When asked if he knows how much of Apple’s $600 billion U.S. spend will go toward custom silicon, Millet said, “I hope it’s a lot.”" MY COMMENT Lots of talk....now lets see how or if they pull this off and if they can put out innovative NEW products like those that built this company.
OK....I dont see much else going on today. We are now done with FED week and it is probably time for the markets to sit and recover from all the made-up drama. it is called......CONSOLIDATION.
It is a busy week for me....plus in addition to the above I will end the week with another trip to Houston on Sunday. A little bit of driving for me this week. BUT....nothing new....I figure I have driven about 1.5MILLION miles over the past 25 years.
