Charles Payne's Market Commentary

Question of the Week

We see hints that the Fed might have to cut 75 bps.

On a scale of 1 through 5 (with 1 being the highest), what is your confidence level that Jay Powell & Co can steer the economy into a "soft landing?"

Post your answer below.

Morning Commentary

AI IS A-OK

By Charles Payne, CEO & Principal Analyst
9/26/2024 9:44 AM

Only two sectors finished higher yesterday, riding the Artificial Intelligence (AI) wave: Technology (XLK) and Utilities (XLU).

This is why there were only two specks of green on the extended factors board: growth and momentum.

More Proof the AI Juggernaut is Just Getting Started

Micron Technology (MU) crushed it after the close, the stock surging 15% on a monster beat and raise.

A significant firm downgraded the stock last week, but after a rough 2023, MU is ready to rock and roll in 2025.

Keeping an Eye on the Economy

It looks like Citigroup (C) is saying what I have been saying. The economy is in far worse shape than Wall Street will admit.

I’m not saying a soft landing isn’t possible, but if current trends remain in place, the Federal Open Market Committee (FOMC) might have to consider a 75 basis points (bps) cut in November.

Today’s Session

It's going to be a monster session in Technology but look for China to catch a bid after one of the richest people in the history of humankind came on CNBC to push his book. David Tepper is pounding the table on China stocks. I’ve been talking about them on my show. They are cheap but it's still communist China where the guy in charge is more interested in Taiwan than anything else these days.

Comments

I'm going with a 3 out of 5 we have a soft landing. On the way up, interest rates were not raised above the rate of inflation, as many called for, so the economy wasn't throttled down as much had interest rates exceeded inflation.
What I would like to know is what are we looking for and when will we know if there's been a soft landing?

Ric Walter on 9/26/2024 9:55:32 AM

To answer Rics question regarding what to look at to tell whether or not there is a soft landing, there are several indicators mainly: Real GDP Growth Rate: Consistent and moderate growth would indicate that the economy is expanding at a healthy pace without contraction or overheating. Unemployment Rate: If unemployment remains relatively low and stable, it would suggest minimal job losses despite tighter monetary policies. Inflation Trends: We want to see inflation gradually coming down towards the Federal Reserve’s target (2%) without triggering a major economic slowdown. Consumer Spending & Business Investment: These should hold steady or show only minor dips, reflecting economic resilience and confidence. If these indicators remain in a favorable range, it typically suggests the economy is on track for a soft landing. Let me know if you have any further questions or would like to dive deeper into any of these areas.

John Jean on 9/26/2024 2:55:23 PM

Not being a professional trader my gut says “3” if the Fed can keep the politicians from making decisions. We need a new administration and then we will still feel some pain to reverse this debacle.

Gregory Timm on 9/26/2024 10:23:36 AM

J Powell and Co get a 4 from me.

Gary Kinaschuk on 9/26/2024 10:24:06 AM

Considering that China is currently engaged in actively stealing everything from our personal information to military classified information and is waging cyber warfare against our banking, electrical distribution, and election systems, there is NO WAY IN THE WORLD that I will invest in anything associated with China. When there is an alternative, I will gladly pay more for products made by companies with NO CHINESE OWNERSHIP, especially if made in the USA.

Charles on 9/26/2024 10:31:45 AM

Highly unlikely if federal deficit spending continues at the current burn rate.

Glen Meinecke on 9/26/2024 10:39:08 AM

For the question of the week. GDP growth came in at 3.0% in the 2nd quarter. Initial unemployment numbers released, are somehow promoted because those numbers are better than the estimates, actually mean's anything in real terms?
Makes me wonder, since the Fed-R is backward looking. If the market around rate cuts in the upcoming months... Is again expecting too much?

Terry Dowler on 9/26/2024 10:47:38 AM

So much of this is misleading. As much as three quarters of increases in the une,employment number is a lack of hiring. The current hiring freeze is the lowest point on record. People are working but getting fewer hours. Real wages were negative for two years and are barely ahead of inflation the last year . They are going to start slipping again. There are a number of additional red flags in the job market. The Fed was behind and probably is still behind if the goal is to stop a massive jobs implosion.

Charles Payne on 9/26/2024 11:02:49 AM

5,
Spending like this has a reckoning.
No way out.

Paul on 9/26/2024 10:52:59 AM

I should have added this on the prior. Will give a neutral 2.5 chance.

Terry Dowler on 9/26/2024 10:53:46 AM

3 if we're lucky - or if he is lucky - regardless of the Fed a change in the administration is needed if the middle class and the country is to return to prospering as in the last administration. We have to turn around else grinding and worse problems will be in the mix.

D Holder on 9/26/2024 11:15:31 AM

why does my government borrow money to give to another country?
how does that make sense?
we are 34,000,000,000,000 in debt!
How much of that debt is owed to us?
Isn't this the greatest example of borrowing from peter to give to paul? NOT PAY PAUL
Why can't paul borrow the money?
This has been sickening me for 50 years.
Again, how much of the 34 followed by 12 zeros is debt to me?
I owe the IRS many dollars
where is my loan?
I could lose everything i have because other countries need it.
I've only had "it" for two years.
My mother was the wife of a military enlisted veteran twice and she was audited twice they couldnt find the military retiree.
I joined a tax "keep me out of jail" service.
We have to hire lawyers to protect us from our covernment.
If they owe $97,000 in taxes and pay $1000 why cant they (IRS) do that for me?

frank strickland on 9/26/2024 5:06:02 PM

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