To kick off this week’s episode, the Money Wise guys report strong market performance for the past week, with the Dow Jones Industrial Average up 670 points (1.6%), the S&P 500 up 77 points (1.4%), and the NASDAQ rising by 264 points (1.5%). Year-to-date, both the S&P 500 and NASDAQ are up 19.6%, with the Dow up 11.6%. They discuss how, with only six trading days left in the third quarter, the Dow has outperformed the NASDAQ, signaling a shift away from tech stocks toward broader market participation. The Money Wise guys also focus on the Federal Reserve's unexpected decision to cut interest rates by 0.5% instead of the anticipated 0.25%. They admit they were surprised by the larger cut, noting it felt like the Fed was correcting a missed opportunity from July. They express concerns about the optics of the Fed’s move so close to the election, potentially undermining its bipartisan image. The Money Wise guys also speculate that no further rate cuts would likely occur until after the presidential election, despite strong market reactions following the rate cut. Additionally, they note similarities between the Fed’s action and the European Central Bank's earlier rate cut of 0.5%, drawing parallels between the two institutions.

This quarter, the Dow outperformed the NASDAQ, with the Dow up 7.5% compared to the NASDAQ's modest 1.2% gain. This shift in performance is significant because it signals a broader market rally, moving away from the tech-heavy focus that has dominated the NASDAQ in recent years. Investors appear to be rotating out of high-growth tech stocks and into more stable, blue-chip companies that make up the Dow, which suggests a healthier, more diversified market environment. This shift indicates that investors are seeking more balanced opportunities, reducing reliance on a few dominant tech companies, and positioning portfolios to benefit from a wider range of sectors.

In the second hour today, the Money Wise guys discuss RIA vs. Broker. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.