From the desks of Stanley Katz & Lauren Madera
“DO YOU REMEMBER
ON THE 21st NIGHT OF SEPTEMBER?”
HAPPY EARTH, WIND & FIRE DAY!
The three major U.S. stock market indices delivered a positive week (i.e., DJIA: +1.05%, S&P 500: +1.22%, Nasdaq: +2.21%) following the Fed’s 25 bps rate cut announced last Wednesday. This is the Fed’s first rate cut of calendar 2025, substantially later than most pundits had anticipated in late 2024. BlackRock’s September “Student of the Market” report highlights how cash has been sitting on the sidelines like a wallflower at the homecoming dance, with money market funds holding over $6 trillion. The firm observes that even modest changes in the yield spread between 10-year and 3-month Treasuries could trigger significant flows back into risk assets. Historically, when this spread has widened from near-zero levels, money has migrated away from cash and toward stocks and bonds, potentially providing tailwinds for markets.
Zacks’ Q3 earnings outlook shows encouraging revision trends that have helped validate the market’s rebound from April lows, though sustainability remains an open question. The firm expects overall S&P 500 earnings to grow +5.1% with revenues up +6.0%, but the story diverges sharply between market segments. While the Magnificent Seven face tougher comparisons and moderating growth expectations, the remaining 493 S&P 500 companies are seeing more favorable revision patterns and easier year-over-year hurdles. This earnings dynamic has supported the broadening rally that lifted markets from their spring doldrums. Whether this momentum can persist through year-end will depend largely on execution during the upcoming reporting season.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
BlackRock:
Zacks:
Argus:
Capital Group:
J.P. Morgan Asset Management:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
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