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We Want Rate Cuts!

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We closed out another fun week in the markets, and it's time to look ahead.

Because traders have one thing on their minds: rate cuts!

1. Traders Are Still Pricing in Rate Cuts

Following Friday's in-line PCE Price Index report, traders were pricing in an 85.5% chance of a quarter-point rate cut in October.

This is down slightly from last week.

But next week, we get several key employment data points:

  • Tuesday: JOLTS Job Openings
  • Wednesday: ADP Nonfarm Employment
  • Thursday: Jobless Claims
  • Friday: Nonfarm Payrolls

If labor markets continue to deteriorate, don't be surprised if that number goes to 100%.

2. Equities Are Pricing in Lower Rates

This quarter, we've seen notable strength in biotech, semiconductors, gold, small caps, and regional banks.

That implies traders have been bracing for lower rates, in a classic example of pricing moving before the fundamentals change.

And interestingly, we looked at our universe of 30 ETFs, and only 2 are negative in Q3: consumer staples (XLP) and natural gas (UNG):


Data: Koyfin

3. Martin Shkreli Put Quantum Stocks on the Hot Seat

Hands down, this is the most entertaining video I've seen this year.

Pharma bro and Wu-Tang Clan antagonist Martin Shkreli laid the smack down on quantum computing stocks like IonQ in an intense debate with Shay Boloor of Futurum Equities.

It was released months ago, but went viral on Twitter/X this week.

WARNING: you may be tempted to short quantum stocks after you watch this. And depending on the market environment, that may be hazardous to your health.

And speaking of quantum…

4. Companies With No Sales Are Doing Great

One of our favorite screens is for companies with a $2.5 billion market cap and under $100 million sales.

In other words, high valuation and little to no sales.

We found 18 US stocks fitting that criteria that are up more than 50% in Q3:

The leader of the pack is the super-volatile QMMM Holdings (QMMM), which is up over 7,600% this quarter after pivoting to becoming a crypto treasury bet:

And speaking of crypto Treasury bets…

5. Tom Lee Explains the Power of Crypto Treasury Companies

A common question among traders and investors is “why buy a crypto treasury company like MicroStrategy (MSTR) or Bitminer (BMNR) rather than Bitcoin/Ethereum?”

Tom Lee of Fundstrat explains:

6. Intel Is a Star

Intel (INTC) has been on fire as of late thanks to a $5 billion investment from Nvidia (NVDA), and speculation of some type of partnership with Apple (AAPL).

It's now up 76% year-to-date.

And it would be the #1 stock in the Dow Jones Industrial Average in 2025… if it wasn't kicked out last year.

In fact, Intel is #16 in the SPX this year… more than doubling Nvidia's return.

7. Investors Are Still Bullish

For the second week in a row, 41.7% of investors are bullish according to the AAII Sentiment Survey:

Image

There was not a single bullish reading from August 6 to September 10.

So there is a chance investors turned bullish right at the top.

Of course, the indices are barely off the highs so let's not get carried away just yet.

8. Tesla (TSLA) Took the Mag 7 Lead – and It's Still Hated

Tesla took off like a rocket in September, and is up 31%, crushing its Mag 7 brethren:

Wedbush Morgan's Dan Ives hiked his Tesla price target to $600 based on AI growth potential, making him the biggest bull on the street.

But here's a fun fact: the average Tesla target price is just $336.18.

That means the average analysts thinks Tesla will DROP by 23%.

Then again, Tesla is an island unto itself and often seems completely detached from its fundamentals.

9. Meet James Rich Young: Trading Prodigy and Mentorship Teacher

In this episode of The T3 Alpha Show, I sat down with James “Rich” Young to learn about his meteoric rise in trading and social media.

 

Want to learn from James? Check out the Pristine Mentorship with James Young and Sami Abusaad.

 

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