September 19th Market Overview

Happy Friday

Another day another index high.

Here's what caught my eye, small caps finally broke the drought. 967 days without a new high on the Russell. That's almost three years of small caps getting left behind while everyone chased the same seven stocks.

When the little guys start moving, it usually means real money is getting put to work. Fed cuts when the economy isn't broken hit different than panic cuts.

Apple's iPhone launch day didn't hurt either. Sometimes the simple stuff works.

Let's dig in...

Today's Big Picture

Small caps break through after three-year drought

The Dow, S&P 500, and Nasdaq hit fresh records. The Russell 2000 notched its first new high in 967 trading days yesterday—nearly three years stuck below previous peaks. This signals the rally is broadening beyond large caps, which typically supports sustained bull markets.

iPhone launch and chip investments boost tech

Apple launched the iPhone 17 globally while Nvidia committed another $500 million to self-driving startup Wayve after its $5 billion Intel deal. Bank of America raised ASML price targets on stronger semiconductor equipment demand expectations.

Policy headlines create near-term risks

Trump and Xi reached a TikTok framework agreement shifting ownership to new investors. The Senate rejected government funding legislation, raising shutdown risk by month-end. The 10-year Treasury yield rose for a third day as bond markets adjust to Fed easing.

Market Overview

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Stock Spotlight

Apple $AAPL ( ▲ 2.97% ) 
The iPhone 17 went on sale globally. Early demand reads prompted a major bank to lift year-end targets. The launch timing with Fed easing creates a nice tailwind for consumer spending into the holiday season.

FedEx $FDX ( ▲ 2.63% ) 
Beat earnings and revenue with adjusted EPS of $3.83 on $22.24 billion in sales. Management reinstated annual guidance but warned of a $1 billion tariff hit from de minimis rule changes that are crushing China-to-US parcel volumes.

Lennar $LEN ( ▼ 3.64% ) 
Fourth straight quarterly profit decline despite beating earnings at $2.29 per share. The real problem is Q4 delivery guidance missing expectations. Aggressive incentives and rate buydowns still can't fix the affordability crisis in housing.

ASML Holding $ASML ( ▲ 0.51% ) 
Bank of America raised the US-listed price target to $1,082 from $833. The Nvidia-Intel partnership could accelerate tool demand as Intel gets more competitive in data centers and PCs.

Big Name Updates

United Parcel Service $UPS ( ▼ 0.89% ) 
BMO cut the rating to Market Perform citing macro pressure and trade policy headwinds. Cost cuts are lagging revenue declines, and the company killed plans to buy Estafeta in Mexico.

Nvidia $NVDA ( ▲ 0.34% ) 
In talks to invest $500 million in self-driving startup Wayve. This follows the $5 billion Intel commitment and shows Nvidia is spreading its platform reach beyond pure AI chips.

Scholastic $SCHL ( ▼ 9.95% ) 
Posted a wider quarterly loss as schools delayed purchases amid funding uncertainty. The education budget squeeze is real and getting worse.

Other Notable Company News

Newmont $NEM ( ▲ 4.21% ) 
Sold its Orla Mining stake for $439 million as part of portfolio reshuffling. Newmont rose while Orla declined on the news.

SolarEdge Technologies $SEDG ( ▲ 3.57% ) 
Extended a strong week as lower Fed rates improve project financing costs. Solar companies are classic beneficiaries of easier money.

Jefferies Financial Group $JEF ( ▼ 1.25% ) 
Deepened ties with Sumitomo Mitsui as the Japanese firm's commercial bank plans to raise its stake to 20%.

Sector Watch

Bond Market

The 10-year Treasury yield hit 4.133% after three straight days of increases. This move is pressuring utilities and real estate while Gold futures climbed toward record highs on dollar weakness.

Higher rates typically hurt rate-sensitive stocks, but tech keeps leading as investors bet the Fed will cut more this year.

Policy Watch

Federal Reserve Powell 
speaks Tuesday for the first time since Wednesday's cut. Investors want clarity on how many more cuts are coming this year.

Government funding 
Senate killed a spending bill 44-48, raising government shutdown odds for month-end. Another crisis could rattle markets if it drags on.

Trade policy 
Trump administration is considering a $550 billion Japan fund for US factories, targeting chips and critical minerals. Eliminating duty-free shipping under $800 is hammering package companies FedEx pegged the annual hit at $1 billion.

US-China relations 
TikTok deal framework splits ownership between new investors and current ByteDance stakeholders. Data security rules will determine if this actually gets done.

Regulatory changes 
SEC chief wants to scrap mandatory quarterly earnings reports, though any change would take time.

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What to Watch

Powell on Tuesday 
First remarks since the rate cut. His tone on future cuts will move rate expectations and sector leadership.

Core PCE Friday 
The Fed's key inflation measure. Lower numbers support more rate cuts and stock gains. Higher numbers could spike yields and hurt growth stocks.

Treasury yield direction 
Three straight days higher puts yields at a key spot. A break above 4.2% could rotate money out of growth into value.

Housing data midweek 
New home sales and durable goods show if rate cuts are helping demand. Critical for homebuilders after Lennar's weak guidance.

Consumer spending signals Costco 
$COST ( ▼ 0.01% ) earnings Thursday give the clearest read on whether consumers are still spending heading into the holidays.

Thanks for reading 🙂

- John

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