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On The Tape

Unthought Known Path of Rate Cuts with Luke Gromen

On The Tape

RiskReversal Media

News, Business, Investing, Business News

4.6757 Ratings

🗓️ 20 September 2024

⏱️ 66 minutes

🧾️ Download transcript

Summary

Dan Nathan and Danny Moses discuss the ongoing bull market, with insights into the S&P 500's new highs and the NASDAQ's performance. They delve into the implications of the Fed's recent interest rate cut, Chair Jerome Powell’s press conference, its impact on the economy, and the potential for more rate cuts amidst discussions of a soft landing. The episode covers the recent trends in tech stocks, banks' performance, and market strategies as hedge funds recalibrate their positions. Guy Adami and Danny Moses welcome back Luke Gromen of FFTT, LLC to discuss his bullish stance on equities despite the Federal Reserve's recent interest rate decision and its implications for the market. Luke explains the mechanics of rising interest expenses for the U.S. government, the impact of Federal Reserve policies, and the current state of the Treasury market. They delve into historical precedents for 50 basis point cuts and their effects on the markets, current fiscal deficits, and the broader economic outlook. Additionally, Luke predicts the performance of gold and Bitcoin, emphasizing their roles in the face of weakening dollar dynamics, and potential future market scenarios. The discussion also touches on the sustainability of the fiscal deficit's impact on GDP, the demographic influences on the economy, and potential risks from future political and fiscal decisions. Subscribe to our newsletter: https://riskreversalmedia.beehiiv.com/subscribe — About the Show: On The Tape is a weekly podcast with CNBC Fast Money’s Guy Adami, Dan Nathan and Danny Moses. They’re offering takes on the biggest market-moving headlines of the week, trade ideas, in-depth analysis, tips and advice. Each episode, they are joined by prominent Wall Street participants to help viewers make smarter investment decisions. Bear market, bull market, recession, inflation or deflation… we’re here to help guide your portfolio into the green. Risk Reversal brings you years of experience from former Wall Street insiders trading stocks to experts in the commodity market. — Check out our show notes here See what adding futures can do for you at cmegroup.com/onthetape. — Shoot us an email at [email protected] with any feedback, suggestions, or questions for us to answer on the pod and follow us @OnTheTapePod on Twitter or @riskreversalmedia on Threads — We’re on social: Follow @GuyAdami on Twitter Follow Danny Moses @DMoses34 on Twitter Follow Liz Thomas @LizThomasStrat on Twitter Follow us on Instagram @RiskReversalMedia Subscribe to our YouTube page The financial opinions expressed in Risk Reversal content are for information purposes only. The opinions expressed by the hosts and participants are not an attempt to influence specific trading behavior, investments, or strategies. Past performance does not necessarily predict future outcomes. No specific results or profits are assured when relying on Risk Reversal. Before making any investment or trade, evaluate its suitability for your circumstances and consider consulting your own financial or investment advisor. The financial products discussed in Risk Reversal carry a high level of risk and may not be appropriate for many investors. If you have uncertainties, it's advisable to seek professional advice. Remember that trading involves a risk to your capital, so only invest money that you can afford to lose. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This communication is not a recommendation or offer to buy, sell or retain any specific investment or service.

Transcript

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0:00.0

Welcome to the On the Tate podcast. I am Dan Nathan, joined by Danny Moses. Danny, how are you?

0:06.2

I'm just enjoying this bull market, Dan. Well, it is a raging bull market. We're going to get to all that.

0:11.0

Guy Dami's not going to be with us today. He is emceeing the FDNY annual gala, which is pretty

0:17.9

cool for him to be doing that. Danny, you're a big supporter of the FDNY.

0:22.4

I am a huge supporter of the FDNY. All right. So here's the deal. If you guys miss Guy in this

0:26.9

segment, Guy and Danny had a great conversation, which is going to be the B block of this fine

0:31.8

podcast with Luke Groman. Luke is a return guest to the On the Tape podcast. He is the founder of macro strategy firm,

0:39.3

The Forest for the Trees. Danny, what were some of the things that you guys hit in that

0:43.6

conversation? We hit the fact that when he was last on in February that he went bullish on the

0:48.3

equity market, which was the right move. So I did the famous James Earl Jones voice.

0:53.6

Instead of saying, Luke, you've gone to the dark

0:55.2

side. I said, Luke, you are my daddy because I try to admit him not to do it. We talked about his love

1:00.6

of gold and Bitcoin, which has been correct. He talked about the deficit. We talked about the oil

1:04.7

gold relationship. A lot of stuff, really interesting. You're smarter if you listen to it for sure. Fair enough. I look forward to

1:11.4

listening to that. I'm sure as our listeners and viewers are. All right. So you mentioned the bull

1:15.5

market, Danny. It's all in one right here. The S&P 500 breaking out to a new all-time high. The

1:20.7

NASDAQ lagging a little bit. The equal-weight S&P, we highlighted this a couple occasions over the last couple weeks, the outperformance there,

1:27.8

which spoke to a broadening out, the equal weight, the RSP, made a new all-time high last week.

1:33.6

So in advance of this, you know, Danny, it's interesting that today on that gap, okay, so the Fed chair,

1:39.4

Powell cut interest rates, 50 basis points on Wednesday. We closed at the low on Wednesday.

1:45.0

We gap up here today. The S&P is only up 2% relative to the NASDAQ, up 3%. Talk to me a little bit about that,

1:51.5

like, what you think is going on here, beta chase and the like here. But again, this is a

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