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Value Stocks Rally on Fed Hopes, Dealmaking

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Next presentation: State of the Market on Monday, 9/8.

Sizing Up the Market

  • S&P 500 pushes above July 28 record close
  • 14-day ROC remains steadily positive
  • RSI sitting near overbought
  • Intermarket:
    • VIX revisits December lows
    • 10-year Treasury yield holds below 4.3
    • U.S. Dollar Index continues lower
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S&P 500, daily chart, with select patterns and indicators. 

Value Rotation Underway?

  • Creative Planning: NVDA+MSFT = 15 percent of S&P 500, the most ever
  • Recent dealmaking:
    • GBIO rallies: “evaluating strategic options”
    • SCS acquired by HNI (office furniture)
    • HBI acquired by GIL
    • SPNS acquired by Advent
    • HI rallies: Bloomberg reports potential sale
    • CNBC: Perplexity AI offers to buy Chrome browser from GOOGL
  • Strategic actions: 1 of 7 Key Catalysts for stock movement
    • Definition: unlocking value from the corporate entity without fundamental business changes
    • M&A, buybacks, spinoffs, dividends

    News & Views

    • CME FedWatch tool: 98 percent chance of rate cut on 9/17
      • Next items to watch:
        • Tomorrow: Retail sales
        • 8/22: Powell at Jackson Hole (likely)
  • Moody’s downgrades INTC credit, citing weak profits
  • S&P upgrades UAL credit, citing profitability and global revenue
  • Energy headwinds?
    • Crude oil inventories +3mln vs -900 estimate
    • IEA: Oil market “ever more bloated” as OPEC+ pushes supply ahead of demand
    • Trump-Putin meeting tomorrow seen as potential catalyst
    • Will cheaper crude help the Fed’s doves?
  • Cannabis stocks rally on potential rescheduling: TLRY GRWG CRON ACB
  • AI still driving high bandwidth memory (HBM)
    • SK Hynix: HBM market to grow 30 percent in 2026
    • MU raises guidance amid strong orders
  • BofA: Raises AVT target from $48 to $50 amid potentially positive order trends (despite Underperform rating).
  • Capital Economics: Chinese stocks may rebound as news improves and earnings stabilize

    • Upcoming Events

    • Earnings tonight: AMAT
    • Fri 8/15: Retail sales
    • Mon 8/18: NAHB housing index
    • Tue 8/19: Housing starts / building permits
      • Earnings: HD
  • Wed 8/20: *Fed minutes*
    • Earnings: BIDU
  • Thu 8/21: Jobless claims
    • Earnings: WMT
  • Fri 8/22: *Powell Jackson Hole Speech*

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    About the author

    David Russell

    David Russell is Global Head of Market Strategy at TradeStation. Drawing on more than two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.
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