Fed's 'Unfinished Business of Rate Cuts' to Boost Stocks, SocGen Says

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00:00Our take is bullish. You know, we have been bullish just for the sake of the year is turning.

00:05Should we change? No, I think the cocktail of events that we have in America is still very

00:10solid. You know, we got, you know, Fed unfinished business of rate cuts. We got the change in Fed

00:15leadership. We have, and what should I say, profit margins expanding beyond tech. We have

00:20one big, beautiful bill coming out in the, you know, front loaded bases. We just combine a lot

00:25of these elements. I find, you know, tech is the only sector which is actually ready to take some

00:31leverage and markets going to give benefit of doubt to them. So we quite like hyperscalers.

00:36We like U.S. hyperscalers. Do you think the Fed cuts? We think Fed cuts. We think they cut in

00:41December. They cut in April. It's absolutely unfinished business on the rate cuts. You know,

00:47the two big macro events that we are watching, one for sure there's midterm elections and then

00:52you have the Fed, change in leadership in the Fed. And I think this, you know, particular event,

00:56change in leadership, will get way more focused for currencies, for equities, for their rates,

01:02you know, whether terminal rates needs to be shifted, you know, lower than where it is today.

01:06I think all of that comes into a big question mark. So how much of this is already priced in?

01:11I mean, you have a president that has certainly not minced his words on what he wanted the Fed to do.

01:16And so there's a general assumption that actually the next person will just be more understanding of

01:23the president's needs. I think we took one very out of consensus call, which is to sell inflation

01:31protection next year. And that's, you know, that's based on the thinking, you know, if you have a

01:36president who's fully focused on affordability as one of the key factors, food prices, utility bills,

01:43energy prices, you know, all the policy uncertainty we had on trade this year, which has reduced to a

01:50large degree, which actually accelerates on the reduction side. So I think we're going to get

01:54impetus, which is a set of, you know, what comes out of Washington is going to help the Fed and the,

02:00you know, the leadership change there.