Will the Fed Raise Rates in September? What the Data Shows

Markets continue to be calm, cool, and collected these days. So, if today we're going to take a look at the S&P 500, see just how calm, cool, and collected it is. We're going to look at what the worst month of the year is in the stock market, which it is September. And then we're going to look at Fed rate hike odds for the September meeting coming up either next week or the week after that. I think it's the following week. Okay. So, before I begin I must remind you this financial education presentation, you must do your own due diligence before acting on anything you hear in this presentation. More disclaimer information can be found on ankerstarwealth.com, and the opinions expressed are mine alone. See, we've got the S&P 500 just taking higher a third of a percent. Not a worry in the world, right? Near all-time highs. For what it's worth, the Nasdaq is down over 5% or it was at the close yesterday. Right kind of perfectly in line with that 5% drawdown. So, a little bit of chop in the tech space that isn't bleeding over to the S&P 500. A little bit more chop in the Dow Jones, but you know, again, that's just 30 stocks. Okay. As far as news of the day, you're probably seeing a little relief here related to Waller indicating that he's fine to keep rates where they are. We do have continued momentum, potentially depends on who you ask, how you slice it, but could be viewed as a little bit more circular financing in the AI space related to Nvidia acquiring Hugging Face for 13 billion. Um and it seems like Hugging Face, you know, was behind some of that. There is some suspicion. Okay, I'll say it. I can't confirm or deny it. There is some suspicion that this relates to Nvidia, some of their circular financing in a specific way, and is Nvidia has guaranteed Coreweave and others, but Coreweave is I think the biggest. Nvidia has guaranteed Coreweave that they will use any excess compute that Coreweave has. That gives Coreweave investors the confidence to own the company because they have a guarantee that the compute will be used, but Nvidia doesn't need excess compute. So, Nvidia acquiring getting involved a little bit more on the side of a company who can use compute or then guide others on what compute they need to use. It kind of could make sense from a circular perspective of guarantee Nvidia guaranteed Coreweave compute capacity, Coreweave potentially has excess compute capacity. So, now Nvidia wants to sublease the capacity that they guaranteed to Coreweave so that Coreweave could buy Nvidia's GPUs. See, you know, I don't know. I can't confirm or deny any of that, okay? This is just something that comes along with the continued deal making in the AI space. Nvidia is an amazing company. They're trading right at all-time highs. I bet you how close are we? All-time high. Yeah, I mean, things are Nvidia, it the world is theirs, right? And I do think there's a pathway we highlighted on the show, pathway for Nvidia to get to a $10 trillion market cap if everything they mentioned in their earnings call, believe last week, is comes to fruition. Let's jump over the S&P 500 here. I told you we'd update it check it out. You know, what else could you want? You're sitting at all-time highs. You're kind of popping. Oh, did the market open? Market just opened. You're up half a percent. So, 7,700, all-time high is 7,800. You're above any level of any concern here. Just enjoying the rally, right? And that's that S&P 500. It's been a ride. If you look at your portfolio from on a 3-year view you've probably had some very very strong returns. So, again, remember that. And I came across a guy I have this guy talked to who he knows where I work and what I do. And he likes to ask about just whatever. We just talk talk and shop, you know, messing just small talk. But he told me over the past 3 months his account's down 22%. And he's been really really getting messed up. Everything he does is offsides. He's getting chopped really bad. And I'm like, "Man, the last 3 months where was the S&P 500 3 months ago?" Uh where were we? June? Beginning of June here? Somewhere. We're like, well, one, we're higher, but we're at the same spot. I mean, we how could you be. So, I told him, "Man, if you're getting chopped around like that, you know, you've been way offsides. You need to and no one is volatility in the market is like as low as you see, right? The volatility index is as low as it gets. So, if you're getting messed up when no one else is getting messed up, the market is calm, cool, and collected. The S&P 500 is at all-time highs. You know, you clearly have been way offsides. And what need to do is essentially like slow yourself down. Uh slow yourself away down. Don't try to make it back. No, slow it down. And then wait for some volatility to hit other people. Wait for the volatility to hit the market and then that's when you can kind of catch your footing again, but anyway. S&P 500 hanging out at all-time highs. Don't hurt yourself out there. Okay, but it September is the worst month statistically. I think it's the only month that averages. No, you got February and September averaging red over the last since 1950. Down about a percent. I believe September is green so far this year, especially with the little pop this morning. So, again, a little bit of chop, a little bit of flat could be could be expected here. Be mindful of that. So, don't you know, you don't need to be trying to if you're trying to make it all back like that guy I was talking. You're trying to make it back in September? You know, you don't have the wind at your back historically, right? They just you got to be mindful out there and again, look back five look where your portfolio was 5 years ago. Sometimes you're in a bull market it's like more more more, but look where you were 3 years ago. Okay, look where you were 10 years ago. You know, and some people I know you might not have been investing 10 years ago, but look where you were 5 years ago, 10 years ago, 3 years ago. We're doing all right, okay? So, so take a deep breath. Don't definitely don't get get over your skis or hurt yourself like that guy did. Hey, last thing here. Um the Fed rate hike. So, we've got rates here, you know, between 350 and 375 basis points. That's like 3 and 1/2 3.75% and that decision's coming up on September 16th. There is a 50% chance of the Fed raising rates. And not the end of the world, but you know, somebody made a good point. If they're going to start raising rates, if they're going to make the decision to raise rates, those things usually cluster. So, it's not going to be it's not that one rate hike is the end of the world. It's that they're going to cluster a couple of these together. And in doing so, they're going to pressure risk assets, right? Higher rates, more competition for stocks, all that stuff. So, we'll see what happens. Fed rate hike coming up soon. Man, nice green day in the market. S&P 500 up half a percent now. So, got to love to see that. I hope everyone has a wonderful day. Couple interesting videos, video ideas, if anybody's still with me here, please let me know what you think. I have an idea, got a guy who, you know, for a scenario, theoretical scenario, of a family who has put themselves in a situation where they have quite a bit of money. Um but they can't get to it. It's all they're like early 50s, and 80% of their money is like IRA, Roth, HSA, 529s, and the taxable account is just really small. And I'm thinking about doing a video of are there any drawbacks to tax optimizing every decision, right? If you tax optimize every decision, could you put yourself in a situation where you have not optimized your life or flexibility that you have in life? Uh let me know if anyone's interested in that kind of video concept and playing that out, and then yeah, we'll see what else the market brings. Hope everyone has a wonderful day. Look forward to talking to you soon.