The Fed Blinks, the Horse Gallops: Is Your Portfolio Ready for the Great June Rate Cut?
πππThey say inflation was too "sticky" but with the market now pricing in an 80% probability of a rate cut by June, it seems the Fed is finally ready to let the "Higher for Longer" narrative hit the dust.
What a Fed Rate Cut Means for the Market
Cheaper borrowing costs for companies will lead to higher investment, expansion and earnings growth.
Lower discount rates means higher valuation for stocks especially growth and tech.
Improved liquidity means more capital flowing into risk assets.
Stronger consumer spending will support corporate revenues.
Weaker US dollar will boost multinational companies' earnings.
A rate cut doesn't just ease financial conditions. It re-energises the entire economic engine.
Will the S&P500 Extend Gains on This Optimism?
In the short term, markets behave like a festive lion dance - energetic, reactive and swaying with every drumbeat of data.
But in the long term, they move like the Horse itself - steady, powerful and relentless.
SPYM : My Long Term Stallion
Whether there is 80% probability of rate cut or not, my conviction does not waver. $SPDR Portfolio S&P 500 ETF(SPYM)$ the lowest cost S&P500 ETF remains my quiet compounding engine.
Why SPYM?
In just 1 powerful trade, I gain access to 500 of America's biggest and most resilient companies. SPYM represents American innovation, from Trillion dollar tech titans rewriting the future to the quiet industrial work horses powering the nation's economy.
SPYM does not bet on a single hero. It owns the entire cast. Every sector, every cycle, every breakthrough - all captured in one ultra low cost engine of long term compounding.
When America grows, reinvents, stumbles, recovers and accelerates again, SPYM absorbs it all and keeps moving forward.
SPYM has the lowest expense ratio at 0.02% - almost free.
Top holdings include the Magnificent 7 - Nvidia $NVIDIA(NVDA)$
Current Dividend yield is 1.1% - steady and reliable.
Analysts' Price Target : According to Tipranks, the average price target of SPYM is USD 98.30, an upside potential of 22% with a Buy rating.
The Road to 7,000 or More for S&P500
The S&P500 Index has officially hit the 7,000 point mark for the first time in history on January 28 2026 at 7002.28. This can be attributed to an intense AI led surge that has defied concerns of market overheating.
While S&P500 Index has flirted and occasionally pulled back from this level due to "AI fatigue" and shifting Fed rate expectations, the overarching trend remains aggressively bullish with many analysts expecting further gains in 2026.
UBS has set a target of 7,500 pointing to "softer landing" scenario and continued though potentially slower growth.
Key Risks and Factors for 2026
AI Fatigue and Valuation : The rapid ascent from 6,000 to 7,000 in only 14 months has caused concerns about stretched valuations (around 22x forward earnings). If AI spending does not translate into proportional revenue, a correction could occur.
Interest Rates and Inflation: A stronger than expected labour market has led to the potential for the Fed to keep rates higher for longer, which could threaten the upward momentum.
Software Armageddon : While hardware is hot, the software sector has faced a "Claude Crash" indicating that AI gains are not uniform and that legacy software companies are lagging.
The 7,000 Barrier: The market has struggled to establish a clean breakout above 7,000 with recent trading showing the index hovering between 6,900 and 7,000 as it digests gains.
The Verdict: The S&P500 is in uncharted territory. While the momentum supports a move to 7,500 or more, the market is currently navigating a "valuation test" rather than a liquidity crisis. It requires a steady stream of positive earnings and economic data to justify further uninterrupted growth.
In the short term the S&P500's path may zig zag but the long term direction remains unmistakeably upward.
The Horse 's Wisdom : Endurance Over Noise
This Lunar New Year I am choosing the Horse' s spirit:
Speed when the moment calls. Strength when the path is steep. Endurance for the long road ahead.
Because Prosperity does not come from predicting the Fed's next move. It comes from staying invested, staying disciplined and letting the magic of compounding carry me forward.
SPYM ETF will keep rising with America's long term growth - rate cut or no rate cut.
Wishing Everyone in the Tiger Community :
GONG XI FA CAIππππ°π°π°
May The Year Of The Horse brings you Strength, Clarity and the Courage to keep moving forward.
May your portfolios grow with resilience, your decisions be guided by wisdom.
May your journey be filled with steady compounding and quiet confidence.
Here's to galloping into 2026 with Purpose and Prosperity. ππππππππππ°π°π°
@Tiger_comments @Tiger_SG @TigerStars @TigerClub @CaptainTiger
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- TCTΒ·02-15 21:42great share1Report