SUMMARY OF FED CHAIR POWELL'S COMMENTS:
1. Downside risks to employment have risen 2. Inflation in the US "remains somewhat elevated" 3. Interest rates are now in a "plausible range of neutral" 4. GDP growth forecast for 2026 has been revised up 5. Readings on inflation are higher as goods inflation has "picked up" 6. Three Fed members dissented today's decision The Fed is divided (but less than many feared). Source: The Kobeissi Letter
The Federal Reserve delivered 25bps, as expected. So why are Dow, Nasdaq surging, Russell 2000 skyrocketing, cryptos soaring while bond yields are plummeting?
The real story is the "packaging" which turned out LESS HAWKISH than the markets expected. This became evident starting with the Statement, and was amplified by Chair Jerome Powell's remarks at the Press Conference. Should we call it a DOVISH CUT ??? 🚀🚀🚀
Largest IPOs in History (by amount raised):
1. SpaceX $30.0B* 2. Saudi Aramco $29.4B 3. Alibaba $21.8B 4. Softbank $21.3B 5. NTT Mobile $18.1B 6. Visa $17.9B 7. AIA $17.8B 8. ENEL SpA $16.5B 9. Facebook $16.0B 10. GM $15.8B Elon would take the top spot. Source: Morning Brew, Bloomberg
Oops... here's why Asian markets are rather weak this morning (despite FED rate cut) and that Nasdaq futures and bitcoin are dropping...
BREAKING 🚨: Oracle $ORCL got nuked on earnings 📉📉 $ORCL falls after missing on Q2 adjusted revenue 💵 Adjusted revenue: $16.06B vs $16.21B expected 💲Adjusted EPS: $2.26 vs $1.64 expected ☁️ Oracle Cloud Infrastructure revenue: $4.1B vs $4.09B expected The "Open AI" complex is likely to get under pressure again (Softbank is down -6% this morning) Source: Barchart
Oracle currently carries $127B in debt, with $25B due within three years.
Despite this, the company is free cash flow negative, reporting roughly –$13B over the past 12 months, and it's not expected to be FCF + before 2028! Source: Patient Investor @patientinvestt
The main takeaways from the Federal Reserve’s updated forecasts:
- Economic growth was revised up (1.9% for 2025 and 2.1% for 2026 when adjusted for the effects of the shutdown, per Chair Powell) but still looks low overall given other indicators. - “Somewhat elevated” inflation is persisting, which Chair Powell attributes to tariffs, with upside risk in the short term. - Weakening labor market with an unclear balance between demand and supply side influences. - Expected decoupling of growth from employment. - Relatively upbeat on productivity but not willing to attribute this to any large extent to AI. Side note: Yes it sounds weird that the Fed is cutting rates while upgrading economic growth forecasts. But their target is mainly the weakening job market. Source: El Erian
ORACLE $ORCL: We now expect fiscal 2026 CapEx will be about 15 billion higher than we forecasted after Q1.
Source: Wall St Engine @wallstengine
S&P 500 profit margins rose to 13.6% in the 3rd quarter, their highest level in history.
Source: Charlie Bilello
