🤔 25 or 50?

Plus, this is the closest thing we have to an "economic growth" button

September 14, 2024

Happy Saturday, and welcome back to our super skimmable Street Tweets newsletter.

Stocks surged yesterday, with the S&P 500 and Nasdaq Composite delivering their strongest week of 2024 ahead of the Federal Reserve meeting.

The S&P 500 gained 0.54%, closing near its July record, while the tech-heavy Nasdaq rose 0.65%, both posting their fifth consecutive day of gains.

Investors piled into megacap tech and semiconductor stocks, with Super Micro Computer and Arm Holdings jumping 3.4% and 5.9%, respectively.

On the week, the S&P 500 climbed 4% and the Nasdaq soared 5.9%, their best weekly performances this year. All eyes are now on the Fed’s upcoming policy meeting, where a 25-basis-point rate cut is widely expected.

But is 25 bps enough? That’s the debate on The Street right now. An article from Nick Timiraos of The Wall Street Journal outlines how Fed officials “are confronting questions over whether to cut by a traditional 0.25 percentage point or by a larger 0.5 point.”

Billionaire investor John Paulson believes the Federal Reserve should opt for a 50-basis-point rate cut next week. "I think the Fed is a little behind the curve," Paulson said on CNBC's "Money Movers."

Not everyone agrees, however. “25 is easy at the start,” said Esther George, who was Kansas City Fed president from 2011 until 2023. “You could say, ‘We can either keep this up for a while, or if it looks like things are weaker, we can go harder.’”

What do you think the Fed should do? Let us know below.

Should the Fed cut rates by 25bps or 50bps?

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A Great list of Wide Moat Stocks:
— Patient Investor (@patientinvestt)
5:58 PM • Sep 8, 2024

“A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital.” - Warren Buffet

We are in a recession.
The macroeconomic data might not reflect it yet, but the downturn has arrived. Everyone knows it. The lagging indicators just need time to catch up.
I talk to a lot of CEOs. They all use the same word when I ask how their business is doing: “Slow.”… x.com/i/web/status/1…
— Robert Sterling (@RobertMSterling)
3:42 PM • Sep 7, 2024

This is a long thread that you’ll need to click to read, but it was thought-provoking to say the very least. Take a look and let us know what you think.

Do you think that we're already in a recession?

Cheap energy is the closest thing that we have to an 'economic growth' button.
There are no low energy rich countries - and almost no countries with cheap energy have stayed poor.
Britain needs a new fleet of nuclear power stations - and short-term North Sea gas licenses 🇬🇧
— Sam Bidwell (@sam_bidwell)
9:15 AM • Sep 8, 2024

Speaking of cheap energy, did anyone catch Oracle's latest earnings call? Co-founder Larry Ellison said that electricity demand from artificial intelligence is becoming so “crazy” that Oracle is looking to secure power from next-generation nuclear technology, according to CNBC.

Apparently, the company is designing a data center that will require more than a gigawatt of electricity which would be powered by three small nuclear reactors.

According to the Nuclear Energy Agency, there are currently three operational small modular reactors in the world. Two are in China and Russia. A test reactor is also operational in Japan.

The US government has spent more than $1 trillion this year on interest payments, as the national debt grows to $35.3 trillion.
— The Spectator Index (@spectatorindex)
9:13 PM • Sep 13, 2024

More than a third of millennials don’t expect to receive any Social Security benefits, according to a 2023 survey by the Nationwide Retirement Institute.

45 percent of Gen Z adults between the ages of 18 to 26 said they expect to not “get a dime” of the benefits they have earned.

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