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Daily Updates: Anticipated Interest Rates

Recent developments at the Federal Reserve, bears on Wall Street, anticipated changes in the upcoming iPhone design, and other noteworthy points.

,   and  Administrator
3 min read
A Figure from the Victorian Era Gazing at a Modern-Day Computer
A Figure from the Victorian Era Gazing at a Modern-Day Computer

Daily Updates: Anticipated Interest Rates

| || --- || S&P 5006,051 (-0%) || Nasdaq19,927 (+0.12%) || Dow43,828 (-0.2%) || Bitcoin$101,450 (+1.63%) |

1. Possible Shift in Fed Policy in 2025?

The Federal Reserve concludes its two-day meeting on December 24th, with a predicted 0.25% interest rate decrease, marking the end of 2024. However, the prospects for future rate reductions in 2025 are becoming less certain, as inflation has yet to reach the Fed's 2% target. There's growing doubt about the expected four additional cuts in 2025.

  • "On the brink of reducing rate cuts each time": Former Fed official David Wilcox anticipates two or three rate cuts in 2025. Luke Tilley from Wilmington Trust still believes in four, stating "They still anticipate inflation to reduce."
  • "Let's exercise a bit more caution": Jerome Powell, Fed chairperson, has hinted towards increased flexibility due to the U.S. economy being stronger than initially believed.

2. Nike Eyes a Comeback

Nike will release Q2 earnings on December 26th. The sportswear giant surpassed Q1 earnings forecasts but fell short on revenue targets.

S&P 5006,051 (-0%)

  • "Year of changes ahead": Investors should prepare for a year of transformations as Nike enters a new leadership phase, with a focus on enhancing digital sales, which saw a decrease in the previous quarter.
  • "Consistent dividend grower for over a decade": As Nike embarks on its growth phase under returning leader Elliott Hill, Matt Argersinger has Nike on Dividend Investor's watchlist, targeting significant dividend growth.

3. Is a Market Downturn Upon Us?

Nasdaq19,927 (+0.12%)

The S&P 500 has been reaching new highs in December and is just a few points away from another record. However, despite Wall Street's optimism about 2025, expecting stocks to keep rising, a bear market might not be entirely ruled out.

  • "The environment does not seem to support the ongoing equity boom": Stifel's Barry Bannister predicts a decrease in the S&P 500 in 2025, pointing towards persistently high inflation impeding rate cuts and affecting stock performance.
  • "Long-term investment is more important than timing the market": Billionaire investor Kenneth Fisher famously said that time in the market is more beneficial than trying to time the market, and patient investors are aware that a bear market can present buying opportunities.

Dow43,828 (-0.2%)

4. Upcoming Earnings Reports

On December 26th, Hidden Gems pick Accenture will release Q1 results, with the professional services specialist surpassing Q4 forecasts last time, driven by its AI-dominated business growth. Shareholders will be interested in seeing if AI contributions account for more than 5% of Accenture's total revenue, signaling full market penetration.

Bitcoin$101,450 (+1.63%)

  • "Unlocking growth since 1996":Rule Breakers recommendation FactSet (FDS) also reports on December 26th, with investors hoping for the data and analytics company's record of surpassing quarterly estimates to continue.
  • "Optimization and refocusing": FedEx, a Stock Advisor recommendation, will release Q2 earnings on the same day, following Q1's flat revenue and lower earnings. Focus on its cost-cutting initiatives and profitability.
A Vincentian-era individual gazing at a digital computer device.

5. Apple and Design Changes

According to the Wall Street Journal, sources close to the matter, Apple plans to make significant changes to its iPhone designs in 2023. Expect slimmer models and more affordable variants with simpler camera technology as Apple focuses on renewed growth following several years of incremental updates.

  • "Fold it up": Apple is reportedly working on two folding devices: a larger dual-function laptop and a foldable iPhone, with a 2026 launch date targeted for the latter.
  • "Future visions": The Wall Street Journal reportedly mentions that Apple has plans for a follow-up to its Vision Pro virtual-reality headset but has not decided upon the specifics yet.

6. Foolish Fun

What will Apple's next major source of revenue be: Virtual Reality headset, Smart Glasses, Folding iPhone or something else? Become a member to be part of the lively discussions among your fellow Fools!

  1. "With uncertainty surrounding the Fed's future rate cuts in 2025, savvy investors might consider diversifying their funds into alternative assets or sectors, such as technology or digital currencies like Bitcoin, in their investment portfolios."
  2. "In light of Nike's Q2 earnings, it could be a wise move for those with a long-term strategy in finance to consider investing in Nike's dividend stock or purchase its financial derivatives, as the returning leader Elliott Hill lays out the roadmap for Nike's resurgence."

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