Latest news with #InterestRateCut
Yahoo
3 days ago
- Business
- Yahoo
Iridium, Applied Digital, HP, Taboola, and Xerox Shares Are Soaring, What You Need To Know
What Happened? A number of stocks jumped in the afternoon session after a key inflation report met expectations, bolstering hopes for a Federal Reserve interest rate cut, while a separate report indicated rising optimism among small businesses. The July Consumer Price Index (CPI) report showed annual inflation holding steady at 2.7%, aligning with forecasts and increasing the probability of a Federal Reserve interest rate cut to over 94%. Lower interest rates can stimulate the economy by making it cheaper for businesses to borrow and invest. Further boosting confidence, the National Federation of Independent Business (NFIB) Small Business Optimism Index rose to a five-month high. This is a crucial indicator for the Business Services sector, as many of its companies cater to small and medium-sized enterprises. The combined positive data fueled a broad, "risk-on" sentiment, where investors favor economically sensitive sectors, leading to gains across IT services, staffing, and manufacturing. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: Satellite Telecommunication Services company Iridium (NASDAQ:IRDM) jumped 4.4%. Is now the time to buy Iridium? Access our full analysis report here, it's free. Enterprise Networking company Applied Digital (NASDAQ:APLD) jumped 5.9%. Is now the time to buy Applied Digital? Access our full analysis report here, it's free. Hardware & Infrastructure company HP (NYSE:HPQ) jumped 4%. Is now the time to buy HP? Access our full analysis report here, it's free. Advertising & Marketing Services company Taboola (NASDAQ:TBLA) jumped 3.2%. Is now the time to buy Taboola? Access our full analysis report here, it's free. Hardware & Infrastructure company Xerox (NASDAQ:XRX) jumped 4%. Is now the time to buy Xerox? Access our full analysis report here, it's free. Zooming In On Applied Digital (APLD) Applied Digital's shares are extremely volatile and have had 100 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was 11 days ago when the stock dropped 3% on the news that a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy. The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve. Applied Digital is up 91.9% since the beginning of the year, and at $14.97 per share, has set a new 52-week high. Investors who bought $1,000 worth of Applied Digital's shares 5 years ago would now be looking at an investment worth $249,504. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
The Guardian
3 days ago
- Business
- The Guardian
Australia's borrowers may have to wait weeks for Reserve Bank's rate cut to reduce their mortgage
Mortgage rates will slide after the Reserve Bank announced a third interest rate cut of the year – but borrowers with some major banks may have to wait weeks for relief. Lenders have lined up to reduce their rates by 0.25%, with 20 banks – including each of the big four – announcing on Tuesday that they will pass on the cuts but only two of them doing so immediately. The third rate cut of the year will deliver a borrower with a $750,000 mortgage a further $111 off their monthly interest payments, once their lender passes it on, according to Canstar. Only two of the banks to announce a cut on Tuesday delivered it the same day, leaving many customers waiting until late August for relief. Mortgage holders at the four biggest banks are charged an additional $7.5m collectively in interest per day when mortgage rates remain 0.25% higher, Finder analysis has found. NAB said it would pass on the cut 13 days after the RBA's move, longer than the 10 days it waited to hand down May's cut. Westpac announced it would wait 14 days to pass on the 0.25% cut, while Commonwealth Bank and ANZ will wait 10 days, as each did in May. One first home buyer, Andrew Giraldi, watched his banks' interest rate moves after the RBA's announcements and was glad to see his lender, Macquarie, commit to passing on the rate cut within three days. Sign up: AU Breaking News email 'My good mate is still waiting for NAB,' he said. The 28-year-old and his partner, Joanna, bought a flat in February with a 6.19% variable rate from Macquarie, which will on Friday fall to 5.44%. Each cut has saved them about $130 a month in repayments, with all three cuts amounting to nearly $400 saved each month compared with February. They have saved nearly $30 a week as Macquarie cuts rates within three days instead of 10. The couple made sacrifices to buy a home in Ryde, midway between Sydney's CBD and Parramatta, even selling a car Giraldi had saved for and worked on for seven years. 'Every dollar makes a difference,' Giraldi said. 'That $30 could be worth double, triple that in the long run. 'I think it would take a few quickly passed-down rate cuts to get the race car back, but it's hopefully in my line of sights in the distant future.' Variable rates have fallen by the same amount as the RBA's cash rate since the beginning of the year, despite the delays. Complex systems and high numbers of customers contributed to delays in banks passing on interest rate changes, according to Sally Tindall, the data insights director at Canstar. 'It is a little bit frustrating, for their variable-rate customers who really just want that relief as quickly as they can get it,' she said. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion If banks passed Tuesday's rate cut on in full, the average rate for all variable owner-occupier loans would fall from its June level of 5.79% to 5.54%. CommBank and Westpac's lowest variable rates fell to 5.34%, while about 30 lenders will offer variable rates of 5.25% or lower by the end of August, Canstar estimated. Just one bank, Police Credit Union, was offering a 4.99% variable rate after the bank's decision, which it has offered since July, though Tindall said more lenders could offer sub-5% variable rates by the end of August. 'A variable rate that starts with a four is a fantastic marketing play, and so you might find that some lenders break that 5% barrier in order to attract new business,' she said. It would take one more rate cut to see a crowd of banks offer rates as low as 5% and two more for major banks to reach that level, Tindall said. The RBA governor on Tuesday flagged two or three more rate cuts were on the table if inflation continued to ease. Short-term fixed-rate loans have offered even lower rates than variable loans since September 2024, with 17 lenders offering a fixed rate under 5% ahead of Tuesday's cut. The month leading up to the RBA's decision saw 20 banks cut one or more of their fixed home-loan rates, Canstar's database indicated. Low fixed rates may not be the best loan but instead a sign of better deals to come, according to Richard Brown, owner of Mortgage Choice Epping. 'The banks are trying to front-run it by reducing their fixed rates … but what that tells most borrowers is that the variable rate's just going to come down even more,' he said. CommBank and Westpac data indicates 99% of new loans since late 2024 have been on variable rates, as borrowers bet on further declines. Easing interest rates have seen homebuyer loans rise almost $40bn from January to July while investor loans have jumped nearly $20bn, APRA data shows.
Forbes
3 days ago
- Business
- Forbes
Inflation Slowed In July—Boosting Hopes For Interest Rate Cut
Consumer prices rose slower than expected last month as President Donald Trump's tariffs gripped markets, according to federal data released Tuesday, as hope remains for a possible interest rate cut by the Federal Reserve. The inflation report is the first since President Donald Trump fired the Bureau of Labor Statistics chief. Getty Images Consumer prices rose 2.7% last month from July 2024 and increased 0.2% between June and July, the Bureau of Labor Statistics reported Tuesday, lower than economist estimates of 2.8%, according to FactSet. Core consumer prices, an economic reading cutting out the more volatile food and energy categories, rose 3.1% year-over-year and 0.3% from June to July, above projections for a 3% and 0.2% increase, respectively. This is a developing story .
Bloomberg
4 days ago
- Business
- Bloomberg
Bond Traders' High Hopes for September Rate Cut Hinge on CPI
Bond investors betting on a Federal Reserve interest rate cut next month face a potential roadblock: inflation. July's consumer price index, due on Tuesday, will give traders clues on how President Donald Trump's tariffs are affecting costs. Economists surveyed by Bloomberg expect the annual core inflation rate to rise to 3%, the highest since February.
Yahoo
6 days ago
- Business
- Yahoo
What would a September Fed rate cut mean for mortgage rates?
Mortgage rates are inching lower as jobs data cools and traders price in a Federal Reserve interest rate cut. Mphasis Digital Risk founder Jeff Taylor explains how that could impact homebuyers and why new builds may offer better value than existing homes. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend. Interest rate traders are price signaling at 25 basis point rate cut in September, according to the CME FedWatch. The 30-year fixed rate mortgage rate sits above 6.7% and has remained in that same narrow range for the last month. What could a possible September cut do for mortgage rates? Well, joining me now is Jeff Taylor, founder of Emphasis Digital Risk. Jeff, it is good to see you. So let's get right to that question. Uh Jeff, you know, if the Fed did cut in September, that would mean what for mortgage rates, Jeff? Josh, thank you for having me tonight. Well, let's just take a look at what's happened over the last few days. August 1st, mortgage rates 30 year were about 6.875. Today they're around 6.5. So we already saw 37% percent basis points or 0.375, that is. And why do we see that? We saw that because the job the jobs report came in under an average of 35,000 jobs over the last three months, much lower than what people had expected. So the mortgage market tends to to to basically the mortgage market moves with the bond market as we all know. So we already saw 0.375 without a Fed rate cut. So if we did get a a a rate cut about 25%, then we'd be probably in around 6 and a quarter per 6 and a quarter percent. And I think that's when we could actually start to see uh maybe some refinance value coming in for people who have refinanced over 7%. You know, Jeff, earlier this morning, uh Mohammed El-Erian, so president of course of Queens College, Cambridge, said a bigger rate cut uh could be in play in September. Take a listen. Is it a lock for September? Yes. I think a 25 basis points cut is is a lock. A 50 point basis point cut is a possibility, not yet a probability, it's a possibility. So Jeff, Mohammed there is saying it's a possibility we get a cut by 50 in September. Let's say that happened, Jeff. What would be the effect? What would be the impact on the mortgage market? So, you know, let's go back and look at 2024. So before there was any rate cuts, right? You went from a 7.5 mortgage rate down to 6.17. And then we had four or three rate rate cuts covering 1% and the mortgage market went back up to 7 point and 4%. My point there is the mortgage market sort of moves, it does have move with Fed cut, but it also sort of moves where it thinks inflation and other key economic data factors, such as the jobs are also moving. So again, a Fed cut would help bring it down, but as I I just said, you know, sometimes it can be counter intuitive to the after Fed cuts where actually the mortgage rate market goes again. So we'll see what happens, but right now I wouldn't be surprised to see the mortgage market and mortgage rate somewhere in the about 6 and a quarter six to 6 and a quarter in the course of the next couple of months. Rates are important, Jeff. So is inventory. What what do we see with supply right now? So, you know, supply is actually what I was looking at some data the other day, I haven't seen this in a long time. Right now, the price of a newly built home is 8% lower, $412,000 the medium than existing home at $435,000. Now, a lot of that's because of builder incentives, 62% getting incentives. And the reason they're doing that is because the overall supply market is pretty healthy. Prices are starting to come down a little bit, but they're still pretty, you know, there's pretty pretty good supply out there. Um again, if I'm looking the market right now, I'd really be focusing on the new new homes right now versus the existing existing market for the reason that I just said as far as price affordability and being a little bit cheaper.
