This week, the stock market reached another record, largely due to the Federal Reserve’s decision to cut interest rates for the first time since December. The S&P 500 and Nasdaq saw several highs after the announcement that the lodging loan rate would be lowered by a quarter point. Central bankers have indicated there might be two more cuts in 2025. As a result, the benchmark funding ratio is now between 4% and 4.25%. Initially, stocks fluctuated following the Fed’s news, but investors seemed to celebrate this anticipated decision as the week progressed. The S&P 500 and tech-heavy Nasdaq rose approximately 1.2% and 2.2%, respectively.
During a monthly meeting on Thursday, Jim Cramer commented that post-rate cuts, “we feel we’re out of the woods until we get our next job numbers on October 3rd, followed by our revenue reports three weeks later.” He noted that the market will be paying close attention to the Fed’s next meeting in late October, describing it as potentially “causing incredible fear.” He added, “I don’t expect major issues, but I’m still cautious about rising prices. This Fed head wouldn’t want to cut rates amidst such conditions.”
The S&P 500’s performance earlier this year also improved, prompting the club to make two deals. On Monday, we planned to adjust our profits in Broadcom, not because of a change in the company’s dynamics, but because we believe stocks will thrive with the rise in artificial intelligence revenues. I noticed that shares I bought back in September 2023 are up about 88%. We also acquired more Boeing stock last Friday and considered this a good time to bolster our position, despite the stock having dropped around 10% from recent highs. The fundamentals for Boeing remain solid, boosted by increased orders as a result of former President Trump’s trade agreement.
This week, three companies made headlines: CrowdStrike, Nvidia, and Apple. CrowdStrike’s shares surged over 12% on Thursday after CEO George Kurtz shared optimistic financial projections during an investor day. They are aiming for $20 billion in annual recurring revenue by 2036, which suggests a CAGR of 15% from the $10 billion target for 2031. Jim mentioned in his meeting that CrowdStrike is “an example of what you want to own,” but acknowledged the concern about its consistently high stock price. However, given the company’s strong growth potential and industry leadership, he feels the high price-to-revenue ratio is justifiable.
Nvidia announced a significant partnership with Intel on Thursday, involving a $5 billion investment in Intel stock. Alongside support from SoftBank and the U.S. government, Nvidia plans to collaborate with Intel on an AI system for data centers, merging its GPUs with Intel’s CPUs. As a result, Nvidia and Intel stocks rose approximately 3.5% and 23% during the session, respectively. Jim emphasized this partnership cements Nvidia’s strong position in the market, even as concerns about potential restrictions on Nvidia’s AI chips in China arise.
Regarding Apple, analysts have recently raised their price target for the company’s stock, reflecting strong demand for the new iPhone models and recent devices like the latest AirPods and Apple Watch. Jim discussed the new iPhone as a good purchase option, especially with promotions from providers like Verizon. He seems optimistic, suggesting this could be a turning point. Overall, there’s a lot to keep an eye on as we move forward.
