Wall Street Frontline | Tim Anderson on Fed Rate Cuts and Nvidia's Earnings Impact

（原标题：Wall Street Frontline | Tim Anderson on Fed Rate Cuts and Nvidia's Earnings Impact）

南方财经全媒体记者 周蕊 纽约报道 

In August, the U.S. stock market faced significant volatility as investors focused on the Federal Reserve's anticipated interest rate cuts and Nvidia's second-quarter earnings. By the month's end, all three major indices posted gains, reversing early losses, driven by easing recession fears and optimism surrounding the Fed's policy shift.

Consumer confidence in the U.S. rose to a six-month high in August, with a more positive outlook on the economy and inflation, despite concerns about the labor market. The consumer confidence index increased to 103.3, surpassing expectations. Meanwhile, the U.S. Commerce Department reported that the Personal Consumption Expenditures (PCE) price index rose 0.2% month-on-month and 2.5% year-on-year, indicating stable inflation as the Fed prepares to cut rates.

Nvidia's second-quarter earnings report showed strong results with a 122% year-over-year revenue increase to $30 billion, driven by its data center business. However, the earnings fell short of market expectations, causing a 6% drop in its stock. Despite this, Nvidia's stock is up 140% this year. The company also announced a $50 billion increase in its stock buyback program. Wedbush Securities analyst Dan Ives highlighted Nvidia's pivotal role in the AI revolution.

As the Fed's rate cuts approach, questions remain about the continued strength of the tech sector and which industries will be most impacted. To explore these issues, we spoke with Tim Anderson, Managing Director at TJM Investments and NYSE trader, in this edition of "Wall Street Frontline."

Wall Street Frontline： Last week the biggest event is Fed Chairman Paul's speech at Jackson Hole. He has sent out a message to the market, it is time to finally cut interest rates. How will the expectation of cutting rates impact the stock market?

Tim Anderson: Well, he certainly had a very positive reaction on Friday, which was the day of his speech, because he did not hedge at all. He was very definitive that they are shifting their policy and they are going to be cutting rates. Now, of course, we don't know exactly how much and how many cuts, but because that will depend on the data a little bit. And I think it would be very unlikely if the first cut in September is a 50-basis point cut. I just think that that might send a little bit of a panic message to the market.

So I think we're looking at two or three 25 basis point cuts before the end of the year, and then we have to see what the data looks like and how the market receives it before we go into next year.

Wall Street Frontline：Do you think the two to three interest rates cuts would fall into like September, November or December, or they're going to skip one month?

Tim Anderson: Well, that's a good question. Now, I think that September and November are very likely and they can very easily cut in November without having an impact on the election because their meeting is two days after the election. So they can avoid any criticism that they're trying to help one candidate or the other because that message, that cut would be after the election. And then in December, it's just going to be a situation as to what the data looks like going forward. Now, clearly these cuts won't have an immediate impact because it takes a while to work through the system. So I think that they're on board with this and that it's going to happen and you've seen the market react very, very favorably to it so far.

Wall Street Frontline：With the expectation of cutting rates, which industries or sectors would be impacted the most?

Tim Anderson: Well, look, that is a great question. And I think that clearly the small cap sector will get some help because they're a group of stocks that acted very well under near-zero interest rates for a number of years. And it's much more of an impact on the smaller companies to have to borrow at higher rates than it is some of the larger companies. But also, one group to keep a close watch on, and this might surprise some people, are the EV and solar stocks, because those companies are borrowing very heavily right now. And if their borrowing costs go down, those stocks have been hit hard by higher interest rates.

Wall Street Frontline：According to the data from CFRA, September has been the worst performing month historically. You're a trader at NYSE, so I'm sure you know this very well. Do you expect this September to follow the historical patterns, or are you seeing a divergence?

Tim Anderson: Well, we've certainly seen some volatility heading into September, and I certainly would not be surprised if we get more volatility over the next couple of months.

But I will tell you, the volatility is very good for the market, and it's very good for investors. And the reason I say that is because even when we had this very sharp three-day sell-off about two or three weeks ago, that helps give investors a level as to where the support is if the market were to have another sell-off. Because before that, we just didn't know.

We were almost like in no man's land. And so now you want those markers on your chart patterns to be able to say, okay, look, it's those lows from Monday when the Dow was down 1,000 points. We want to look at the level for the S&P, for the Dow, and for the other major indexes if we were to sell off again.

So I always tell people embrace the volatility. First of all, the volume usually picks up, and then it gives you an idea not just of where the support is for the major averages, but the stocks that are really in favor or out of favor when we recover from those sell-offs. You can see the stocks that really the investors are buying on a stock selection basis, not just the index funds.

Wall Street Frontline：Given the recent market rotation and also the market volatility we just talked about, Dow just hit new record highs, while at the same time Nasdaq has been under some pressures. How are traders at New York Stock Exchange reacting to the reduced exposure to technology stocks and also the increased focus on financials and industrials?

Tim Anderson: Well, those are the two sectors that have gotten some of the money that's been rotating out of tech. Now, tech is still doing well, but it had such a strong first six months of the year and really the last 18 months that it would be so healthy to have some of that buying and institutional money rotate into some other sectors.

Market strategists and a lot of market critics have been saying for a couple of years, oh, the rally is too narrow, it's all tech, it's all these magnificent seven. So, if we were to get that to broaden out and if the financials could act even a little bit better, and if some of the industrial names and the material stocks could act a little bit better, that would really be so healthy for the market to have high-profile sectors other than just tech and a narrow group within tech leading the charge.

Wall Street Frontline：Does the rotation out of technology stocks mean a pessimistic view on technology or are you still optimistic on technology?

Tim Anderson: Look, I think technology can still do very well. Now, it might not be the leading sector during the second half of the year. I mean, look, it would surprise a lot of people that even utility stocks are up 20% year to date. Now, a lot of that is because the AI effort and companies need a lot of electricity and a lot more electric power to produce everything that's required to fuel the AI surge. But there's a sector that you would normally think to be defensive, but these stocks are up 20% as a sector year to date. So, even if tech doesn't have the strongest performance, it can still have good returns the remainder of the year.

出品：南方财经全媒体集团 

栏目策划：于晓娜

栏目统筹：向秀芳

出镜记者：周蕊 

翻译&制作：周蕊 段伊航（实习生）

设计：林军明 廖苑妮