🪔 What to expect this week

What to expect this week

Stock market and rate cuts

Reverse mortgage

Economic Data: Empire State Manufacturing Index (September)

Key Earnings: Dave & Buster’s (PLAY)

Economic Data: U.S. Retail Sales (August), Import Price Index (August), Industrial Production (August), Capacity Utilization (August), Business Inventories (July), Homebuilder Confidence (September)

Key Earnings: Ferguson Enterprises (FERG)

Economic Data: Federal Reserve Interest Rate Decision; Fed Chair Jerome Powell Press Conference; Housing Starts (August)

Corporate Events: Meta Connect 2025 – Meta CEO Mark Zuckerberg delivers;

Economic Data: Initial Jobless Claims (Week ending Sept. 13); Philadelphia Fed Manufacturing Survey (September); U.S. Leading Economic Indicators (August)

Key Earnings: FedEx (FDX); Darden Restaurants (DRI); Lennar (LEN); FactSet Research (FDS)

Spain’s credit rating upgraded to ’A+’ by S&P on strong growth.

Canada announces new federal agency to build affordable housing.

China launches discrimination and dumping probes into US chips ahead of trade talks.

Stock Market Impact: A 25-basis-point rate cut, widely expected with over 90% probability, could sustain or boost the ongoing stock market rally, as historical data suggests the S&P 500 typically gains ~11% in the 12 months following initial rate cuts. Sectors like Big Tech, housing, utilities, and consumer discretionary may see stronger gains due to lower borrowing costs and improved investor sentiment. However, a smaller-than-expected cut or cautious Fed guidance could lead to short-term volatility or a pullback if markets have overpriced expectations.

Bond Market and Savers: Bond prices, particularly for intermediate-term and investment-grade bonds, would likely rise, offering capital appreciation and locking in current yields (4-4.5%). Savers in high-yield savings accounts or CDs could see yields drop (e.g., from 4% to 3.25% on $10,000, reducing income by ~20%). Investors may shift cash into bonds or ETFs like iShares Core US Aggregate Bond ETF to capture higher yields before further cuts.

Borrowers: Lower rates would reduce costs for variable-rate debt like HELOCs and personal loans, though fixed-rate mortgages, tied to the 10-year Treasury (currently ~4.07%), may not see significant declines due to inflation concerns and Treasury supply. Borrowers might benefit more by waiting for additional cuts.

Economic Context: A cut signals Fed support for a slowing economy, potentially avoiding stagflation. However, if perceived as a sign of deeper economic trouble, it could dampen investor confidence, especially if inflation remains sticky or Trump’s tariffs increase costs.

Stock Market Impact: A decision to hold rates steady at 4.25-4.5% could trigger a market sell-off, as Wall Street expects a cut. High valuations in growth sectors like tech could face sharper pullbacks, and rate-sensitive sectors (utilities, real estate) may underperform. The S&P 500’s recent record highs could face resistance, with increased volatility if investors perceive the Fed as overly cautious amid a weakening job market.

Bond Market and Savers: Bond yields, particularly the 10-year Treasury, might rise toward 5%, making bonds more competitive with equities but increasing borrowing costs. Savers would continue earning ~4% on high-yield savings and CDs, preserving income. However, the $7.6 trillion in money market funds is unlikely to shift significantly to stocks unless rates drop substantially.

Borrowers: Borrowing costs would remain elevated, with no immediate relief for HELOCs or variable-rate loans. Mortgage rates (~6.48% for 30-year fixed) would likely stay high, discouraging refinancing or home purchases, especially with inflation and tariff pressures.

Economic Context: No rate cut could signal Fed concerns about persistent inflation or tariff-driven price increases, potentially slowing economic growth further. This might raise recession fears, negatively impacting corporate earnings and stock prices, though strong fundamentals could mitigate some downside.

You must be at least 62 years old.

You must own your home outright or have a low remaining mortgage balance that can be paid off at closing with reverse mortgage proceeds.

The home must be your primary residence (not a second home or rental property).

Eligible properties include single-family homes, FHA-approved condos, townhomes, and certain multi-unit properties (up to 4 units, as long as you live in one).

You must demonstrate the ability to pay property taxes, homeowners insurance, and maintenance costs.

You must complete a HUD-approved reverse mortgage counseling session to ensure you understand the loan terms and implications.