🚀 Fed Meeting Takeaways

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Market Overview
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Year To Date Performances:

1. The Federal Reserve delivered a quarter-point rate cut that was both expected and unusually divided, with three formal dissents and six officials signalling they wouldn’t have supported the move, underscoring deep uncertainty about how much further easing is appropriate. Despite the internal split, markets rallied as the Fed kept its longer-term “dot plot” essentially unchanged, projecting only one cut in 2026 and another in 2027, a stance traders partly accepted while still pricing in a meaningful chance of additional easing next year. The Fed also announced it will resume buying short-term Treasury bills to stabilize funding markets—widely interpreted as a quiet form of extra support for risk assets. Chair Jerome Powell struck an upbeat tone on the economy, highlighting stronger growth expectations for 2026 even as the committee grapples with delayed economic data, policy ambiguity, and an imminent leadership transition. Analysts say all of this sets a high bar for a January cut, though softening labor indicators could still keep the door open.

2. Oracle shares plunged 11% after the company posted weaker-than-expected revenue. This sparked a broader selloff in AI names like Nvidia, AMD, and CoreWeave, even as its earnings beat expectations and cloud demand remained strong. Investors are questioning whether Oracle’s massive AI infrastructure spending is sustainable, especially with revenue softness in software, negative $10 billion in free cash flow, and capital-expenditure plans now swelling to $50 billion for the year. While the company highlighted huge AI-related commitments—including deals with Meta, Nvidia, and a multiyear $300 billion infrastructure agreement from OpenAI—its ballooning remaining performance obligations and rising debt needs fed concerns that growth may not justify the financial strain. Leadership also emphasized “chip neutrality” after selling its Ampere stake, signalling a shift away from in-house chip bets as Oracle races to keep up with hyperscalers in the cloud and AI arms race.

3. Coca-Cola announced that Chief Operating Officer Henrique Braun will replace longtime CEO James Quincey on March 31, 2026, marking a major leadership transition as the company faces slowing global demand for soft drinks. Braun, a nearly 30-year Coke veteran who became COO earlier this year, is expected to focus on international growth opportunities, sharpening consumer insights, and improving the company’s technology capabilities. Quincey, who has led Coca-Cola since 2017 and steered it through bottling refranchising, the pandemic, and a shift toward healthier beverages, will stay on as executive chairman. The change comes as Coke works to revive volume growth among lower-income consumers by offering smaller and cheaper products, even as premium brands like Smartwater and Fairlife outperform its core soda segment. Despite softer soda demand, Coca-Cola continues to outpace Pepsi, and its stock—up nearly 13% this year—reflects its stronger market position and a market cap that now exceeds $300 billion.

   Headlines

   1. Trump claims that the US government has seized an oil tanker off the coast of Venezuela.

   2. The US has given Switzerland a deal that will retrospectively lower its tariff rate to 15% as of mid-November.