| Homepage / Portfolio / Special Reports Let the Good Times Roll It’s like we’re leading by 10 points with two minutes left to play. The result is practically inevitable, but we still have a little bit of time left before victory is official. And there might be a few mild scares in the little time remaining. It’s been a long waiting game for the first interest rate cut. The Federal Reserve held rates steady for 14 months until yesterday, when this often slow-to-act group boldly cut rates by half a point. That size cut is rare when the economy is as healthy as it is now, so investors hemmed and hawed a little bit yesterday wondering whether to be euphoric or concerned. Based on today’s move, the answer seems to be euphoric. At this point, I need to add my little disclaimers. We’re in the worst time of year for stocks, and we’re in an election year. It probably won’t be a straight shot higher, but the light just turned green for a juicy end-of-year really that is also consistent with seasonal and election-year patterns. This week’s rate cut – with many more likely to follow into 2025 – simply adds fuel to make the liftoff bigger and better. We see it in our stocks, which gained 2.7% on average in today’s surge. More than 90% of our current stocks are in the green – 21 of 23. And after yesterday’s news, the future looks even brighter. The data is clear. Low interest rates are good for the economy. They spur growth as money becomes cheaper, and corporate earnings increase as debt burdens lighten up. And since 1990, the S&P 500 gains 7.7% on average in the 12 months after the first rate cut in a new cycle. That’s decent but not great. But here’s the thing: Those cuts came when the economy and market were teetering on the edge of panic or already panicking. Think the dot-com bubble bursting, the 2008 Great Recession and financial crisis, or even the recent March 2020 panic when everything was shutting down because of Covid. And right now? Things are good by any objective measure. The S&P 500 has gained 20% already in 2024. Inflation is down. Employment is solid. The consumer is alive and well. Recession is a no-show. That opens the gates for a huge chunk of that record $6.5 trillion sitting in money market accounts to flood back into stocks. That 5% annual return investors have enjoyed is over, and it’s only going to decrease more in the coming months and into 2025. Big Money has already started putting cash to work. Especially since July 11, when June’s Consumer Price Index fell for the first time in four years. That’s when we see Big Money begin betting on a September rate cut. One of my best gauges of money flows is my system’s Big Money Index (BMI). It has jumped from 46.4 on July 11 to 72.9 through yesterday. That means 72.9% of all Big Money signals in my system are buys right now, leaving just 27.1% as sells. 
Source: MAPsignals.com Can you guess which stocks are our biggest gainers since July 11? If you’re thinking home builders, which benefit from both a housing shortage and lower mortgage rates, you’re right. D.R. Horton (DHI) has jumped 32% in that time, with PulteGroup (PHM) not far behind at 27%. Stocks as a whole look set to enter into a new phase of prosperity, and our stocks – with the superior fundamentals, strong technicals, and Big Money inflows – are primed to lead the way. There’s good money to be made, and when we’re ringing in the new year in just a little over three months (which is crazy!), I expect we’ll have a lot to cheer about. 
Stocks on the Move There isn’t a whole lot of company news right now as we get ready to finish the third quarter. That’s often not a bad thing because stocks can move on their own merits and not on headlines. The biggest headline of all was yesterday’s rate cut, and that attracted buyers to our stocks. Some of our biggest gainers today were technology and semiconductor names that have been volatile the last couple of months: - Monolithic Power Systems (MPWR): 5.9%
- Applied Materials (AMAT): 5.7%
- Advanced Micro Devices (AMD): 5.7%
- KLA Corp. (KLAC): 5.7%
- ASML Holdings (ASML): 5.1%
Salesforce (CRM) also added more than 5% today after a good week with several positive developments out of its annual Dreamforce conference. The company promoted its Agentforce AI platform, which CEO Marc Benioff called “the biggest breakthrough that we have ever had in technology.” Salesforce also announced a collaboration with Nvidia to join their platforms. In addition, ServiceNow (NOW) and PulteGroup (PHM), both hit all-time highs this week. Accenture (ACN) fell 5% Tuesday after a Bloomberg article reported that the company will delay annual promotions by six months – from December to next June. According to the article, the company will stay with June in future years because of better visibility into clients’ spending plans. A lot of companies cut back on at least some spending amid inflation and worries that higher rates could trigger a recession. That dynamic should change, but we may find out more when the company reports earnings next Thursday before the market opens. Analysts estimate modest growth of about 2.5% with earnings expected around $2.78 per share on $16.4 billion in sales. That’s in line with growth expectations for the full year, with earnings projected to bump up 7% next year. I’ll update you next week or reach out sooner if necessary. Talk soon,  Jason Bodner
Editor, TradeSmith Investment Report | 
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