Shesa's Weekend Stock Market Update - 9|28|25

First of all, CONGRATULATIONS to Indian Cricket team for winning the Asia cup!!

Stock Market last week
This September has been pretty good so far comparing to previous years. Only two more trading days left. Last week the stock market, particularly Nasdaq pulled back a little bit. The U.S. stocks hit records but dipped weekly: S&P 500 -0.3%, Nasdaq -0.7% to 22,484.07; Dow -0.2% to 46,247.29; Russell 2000 +2.16%. Fed’s Powell speech signaled 1-2 more 2025 cuts but indicated that a challenging economic situation with inflation risks from tariffs and employment risks from a weakening labor market. He noted high stock prices contribute to loose financial conditions but won’t drive Fed policy. The stock market is not in a bubble like 1999 .com maniac but I quite did not understand the statement made by Powell about "high stock price". Agreed, some stocks went too high but if we see overall market it's no where in the bubble territory. Powell supported further rate cut  to protect jobs but signaled no rush for aggressive action. The same old congressional budget approval drama continues in Washington. We will see how it goes.

Economic news last week
  • The core personal consumption expenditures (PCE) price index showed inflation in August at 2.9% on an annual basis after rising 0.2% for the month. Both were in line with Wall Street estimates.
  • The commerce department revised their Q2 GDP estimates to 3.8% vs. 3.3% earlier.
  • US Existing Home Sales -0.2% from July.
  • US New Home Sales up +20.5% from July: This was surprisingly better. It was highest since January 2022. This can be attributed to price cuts by builders, sales incentives and declining mortgage rates.
News and Views
Tesla (TSLA): The EV CREDIT of $7,500 comes to an end in two days i.e 30th September. This may be the last chance to avail the tax credit. The September deliveries numbers will be declared on October 2 before the market open. Watch this number..

Trump approves TikTok deal through executive order, Vance says business valued at $14 billion. Oracle's chairman Larry Allison seems to have a major stake.

Congress is deadlocked on FY2026 budget approval, with funding expiring September 30, 2025, risking shutdown. 

I will keep an eye on the job report to be published on October 3. This may be important for Fed's rate cut decision.

Economic Report this week
WED, OCT 1: ADP Employment
FRI, OCT 3: U.S. Employment/Job report  => Extremely Important for the market.

What to expect this week
As I said in my WhatsApp group, this could be attributed to some profit taking after huge rallies. Secondly, this is quarter end, so portfolio rebalancing by institutional investors and Mutual Fund creates volatility. Stocks don’t move in straight lines. We are left with only two trading days this week. The institutions would add some good stocks and trim others, hence we may see a few stocks go up and few others go down. This may create some volatility before the tech companies earnings kick-off in about 3 weeks. But I believe such pull back provides good trading/investing opportunities. I am not concerned on small pullback rather welcome any such opportunity. I think this week the stock market may see some bounce, if Budget is approved and we get reasonable job numbers. Having said that, one must be willing to hold the stocks for a few months, if needed. Always one should do due diligence. 

Stocks to watch
TSLA, NBIS, AVGO, CRWV, APLD, ORCL, TEM, NVDA, ALAB, RDDT, HIMS, HOOD, IONQ, GOOG, META, MSFT, OPEN

I may not be able to post my weekend updates next week. Have a good evening!

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