Next Day Prep: Fed’s Rate Cut Bet Sparks Sector Rally
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep — What We Are Watching Tomorrow! The market appears to be drifting higher, cautiously awaiting the Fed’s decision. The S&P 500 closed slightly up at 0.2%, wrapping up a relatively quiet week on a positive note.
Overnight Headlines
Key headlines today included major mergers, persistent inflation, and a remarkable surge in beauty retail stocks defying expectations.
Economic Announcements
The PCE inflation report indicated core inflation at 2.8%, yet with an 87% probability of a rate cut next week, traders perceive bad news as potentially good news for risk assets.
Earnings Highlights
- Netflix (NFLX) announced its purchase of Warner Bros. Discovery for $72 billion, reshaping the media landscape.
- Ulta Beauty (ULTA) reported outstanding results, propelling the stock over 12% on a beat-and-raise with a surge in revenue and comp sales.
Top Movers
Alphabet and Meta showed strong performance, leading the Communication Services sector higher while Ulta Beauty surged post-earnings.
Quick Trade Ideas
Watch for continuation setups in Vertiv (VRT) poised for a potential push to $195 and Broadcom (AVGO) eyeing a move towards $400.
Key Takeaway
Focus on sectors displaying strength like Communication Services and AI Infrastructure. Stick with leaders seeing relative strength and specific positive trends in the market.