Stock markets remain relatively subdued in anticipation of the Federal Reserve's decision day: Daily Stock Market Update
The Federal Reserve is gearing up for a pivotal meeting, with a decision on the federal funds rate due at 2 pm Eastern Standard Time on Wednesday, and a press conference by Fed Chair Jerome Powell to follow at 2:30 pm.
In a notable turn of events, the position of Fed Governor Lisa Cook was secured by a decision of the U.S. Court of Appeals for the D.C. Circuit to uphold an injunction imposed by a lower court on President Trump, preventing him from firing her.
Meanwhile, the Federal Open Market Committee (FOMC) will welcome a new member, Philip Jefferson, who joined on September 13, 2023, and will be attending the meeting.
The market is abuzz with optimism for GE Aerospace, with Morgan Stanley analyst David Arcaro reiterating his Overweight (or Buy) rating and a 12-month target price of $675 for GE stock. Arcaro sees multiple upside opportunities for GE Aerospace, including share gains, new product launches, and further margin expansion. He also sees a healthy backdrop for the gas turbine market.
GE Aerospace hit a new all-time high on Tuesday, trading as high as $294.74, surpassing its intraday peak at $289.94 in 2000 and its all-time closing high of $287.55 on the same day. This remarkable growth comes after GE completed its three-way separation in April 2024, forming GE Aerospace, GE Vernova, and GE HealthCare Technologies.
The housing market, however, remains soft. The NAHB Housing Market Index remained at 32 in September, below a forecast for an uptick to 33, and 39% of builders cut prices in September. Regionally, conditions remain weak, with the South reporting an unchanged HMI of just 29, while the Northeast bounced back to 44.
The consumer, on the other hand, continues to propel the economy forward, with excellent sales for online businesses, clothing, and school supplies. Weak grocery sales in August might indicate that lower and middle-income consumers are retrenching, but affluent consumers are in better shape, fueling the outperformance of overall retail sales. Retail sales increased by 0.6% month over month in August, well above a forecast for 0.2% growth, and expanded by 5.0% year over year.
The long-term outlook for GE Aerospace is positive, with continued top-line growth and EBITDA margin expansion well into the 2030s. Comerica Bank Chief Economist Bill Adams also notes the consumer's significant role in driving the economy forward.
Nick Timiraos of The Wall Street Journal described the current FOMC meeting as "one of the strangest in years." The probability of a rate cut at the current FOMC meeting is 100%, according to CME FedWatch. Stephen Miran has been confirmed to replace former Fed Governor Adriana Kugler on the central bank's board and is present and voting at the current FOMC meeting.
As the market awaits the Fed's decision, the Nasdaq Composite was off 0.1% at 22,334, the S&P 500 had slipped 0.1% to 6,066, and the Dow Jones Industrial Average was down 0.3% to 45,757 at the closing bell on Fed Day Eve.
Read also:
- Show a modicum of decency, truly
- Latest updates for July 31: Introduction of Ather 450S with expanded battery, unveiling of new Tesla dealership, and additional news
- VinFast's debut EV plant in India, Tata Harrier EV distribution starts, next-gen Mahindra Bolero sightings caught on camera
- Tesla-powered residences in Houston create a buyers' frenzy
