Published: Wednesday, October 1, 2025 · 11:30 AM | Updated: Wednesday, October 1, 2025 · 11:30 AM
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00:00 Speaker A
is on this final day of the third quarter. What are the biggest risks that investors need to watch out for in the fourth quarter? Let’s just say the biggest things. Maybe it doesn’t need to be a risk. Ally Canal, let’s start with you on as as you kind of take a lay of the landscape headed into the end of this year. Um, things that are standing out to you, conversations that you’re having, areas that folks are either looking for opportunities, as Inez was just talking about, you know, utilities, other places, or things that draw some concern with this the S&P on track for yet another year of double digit gains at least through the first three quarters of the year.
00:46 Ally Canal
Yeah, the S&P has done incredibly well. There’s obviously a few components that we’ve been talking about throughout the show as to why, big tech being one of them, the resiliency of earnings, and also the start of Federal Reserve easing. So I’m very curious about the Fed in the fourth quarter. Will they deliver those two rate cuts as expected? There is some commentary out there. Ed Yard Denny, a friend of the show, he’s talked a lot about how the Fed does not need to cut rates in this current environment. and if they do, they risk a melt up in stocks. And what happens when stocks melt up, there’s usually a crash that comes shortly after that. Now, there’s others on Wall Street that feel as though the Fed is supportive of these current valuations and that’s only going to fuel higher highs as we head towards the end of the year and into 2026. So, if the Fed does not uh cut interest rates by, you know, 50 basis points in totality, what is the reason behind that? Is there a surprise surge in inflation? That’s something that I think the markets could be spooked about and create a little bit of volatility, especially since markets are really banking on these rate cuts and and the continuation of Fed easing. We’ve already seen mortgage rates come come down pretty significantly from the start of the year. We know that a lot of buyers have been priced out, locked into these lower mortgage rates. So, from a consumer perspective as well, a lot is riding on what the Fed continues to do in the future. So my eyes are on the Fed.
02:18 Speaker A
All right, Omar, as you think about uh the fourth quarter of this year, uh I’m also curious just from your team’s perspective, at what point does the attention start to really turn to the 2026 outlook. My recall is that these start rolling in sometime around Thanksgiving, maybe a little bit before and just how are you teeing up uh these final three months of 2025?
02:44 Omar
Yeah, looking ahead, it’s always uh a good opportunity to set up, you know, we we’d like to just tack this six months period where, you know, team positions portfolios just so that we can look at where things will go on the opportunities that we may see over the next six months. Uh, interesting enough as as we see the end of the year and we prepare for, you know, the beginning of the fourth quarter and going into 2026, you know, we see the potential risk associated with, you know, an economic slowdown that everybody has talked about, uh in combination with higher inflation rates. So I think sticky inflation was something that obviously everybody expects to continue to watch very closely as we see the effect of tariffs that usually take 18 months to hit where we see the uh ongoing, you know, situation with price increases as well as generally just trends in inflation that are beyond what the Fed expected, you know, in combination of a further slowdown of the economy. That could bring a lot of volatility in the market, especially when you have a market that is already over their uh averages in terms of valuation. So that that volatility is something we expect for the the the the the this end of this year. Uh, but if we get past that, what we expect to happen is the big possibilities is that we have an increasing capital expenditures across the market. You know, we have seen a little bit of that slow down on capex at the beginning of this year and we’re starting to see companies start to deploy and that capex, you know, tends to, you know, realize in future earnings. Uh, we see the possibility, of course, as the Fed, you know, reduces rates and goes into their easing cycle, that could benefit areas like small cap that could also benefit areas on cyclical that have been out of favor. And what we really are, you know, looking into more closely for 2026 is that rotation away from the top heavy Mag 7 into other parts of the AI uh trade as well as another parts of the market. So that increase in breath, you know, is something that we look as possibilities going into 2026.
05:07 Speaker A
All right, Inez Ferre, you’ll have the last word. One thing we have not discussed today, gold.
05:13 Inez Ferre
Gold, that’s right. Uh gold with its record rally this year. Uh and it’s and it’s uh up 45%. Look, uh the dollar is something that you’ll be wanting to watch out for uh going into this next quarter because the dollar has been so supportive, the declining dollar has been so supportive of this gold rally. I’m also watching though crypto because gold’s rally tends to front run crypto and October tends to be the seasonally the strongest month for Bitcoin. The fourth quarter tends to be also seasonally the strongest month for Bitcoin. Having said that, we did see uh some volatility in September, but for Bitcoin, Bitcoin is actually said to end the month higher by about 4% for Bitcoin. So that raises the bar for October uh for the uh Bitcoin expected uh rally. But you’ll we’ll have to see, but definitely gold tends to proceed. We’ll see if the uh crypto bulls are correct with the fourth quarter and the crypto space.
06:33 Speaker A
That’s right. It’s called Up Tober actually. So we’ll uh we’ll keep we’ll keep that in mind as we get into uh October trading tomorrow.
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