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Briefing.com Summary:
*The stock market is back in good spirits amid renewed optimism about a December rate cut.
*Alphabet is up 4%, running on positive reviews of its Gemini 3 model.
*Airlines are predicting a record number of Thanksgiving travelers.
The stock market enjoyed a needed rebound effort on Friday, and—what a surprise—the catalyst for the recovery was a shift in rate cut expectations for the December FOMC meeting. New York Fed President Williams (FOMC voter) made it happen, noting that he sees room for a near-term adjustment to the target range for the fed funds rate.
There was an assumption that his view was a plant of sorts to offset the views of some of the more hawkish-minded participants, who have been more vocal of late about possibly holding off on a rate cut in December.
No matter the angle, one could see in the fed funds futures market that the Williams view won out on Friday. The probability of a 25-basis-point cut in December went from less than 40% to north of 70% after his remark, notwithstanding that three other officials—Collins, Hammack, and Logan—all suggested another rate cut in December could probably wait.
The market maintained its renewed optimism about a rate cut over the weekend. The probability of one sits at 73.5% this morning, according to the CME FedWatchTool. Coincidentally, the equity futures market is pointing to a higher open.
The S&P 500 futures are up 39 points and are trading 0.6% above fair value, the Nasdaq 100 futures are up 210 points and are trading 0.8% above fair value, and the Dow Jones Industrial Average futures are up 113 points and are trading 0.3% above fair value.
Buy-the-dip interest has been spurred by Friday's rebound effort, and it is being supported by leadership from the mega-cap space.
Alphabet (GOOG/GOOGL) is up 4%, continuing to run on positive reviews of its Gemini 3 model that are helping its standing in the AI leadership/market share race. Tesla (TSLA), for its part, is up 2%, with Elon Musk touting the company's AI chip production efforts.
The rest of the "Magnificent 7" are higher, so there is a lot of weight underpinning the early action.
That is setting the tone for the broader market at the start of this holiday-shortened week that will feature several Treasury auctions, starting with a $69 billion 2-yr note auction today, and the September PPI and September Retail Sales reports on Tuesday.
There will also be a lot of traveling this week. Airlines are predicting a record number of Thanksgiving travelers, according to CNBC. On a related note, the stock market will be closed Thursday for the Thanksgiving Day holiday and will have an abbreviated session on Friday, with an early close at 1:00 p.m. ET.
