Wednesday, August 13, 2025
Market participants continue to ride the narrative that interest rate cuts will be coming down, and perhaps faster than we had initially thought. Recall not long ago, a plurality of analysts were considering zero rate cuts for 2025. Now we’re up to 2-3 again (it had been 5-6 at the start of the year), and at least one might be a 50 basis-point (bps) cut, not 25 bps.
This would presumably bring down mortgage rates as well, which is why we’re seeing mortgage lenders like Rocket Companies RKT up another +7.4% today. Homebuilders Pulte Home PHM and Lennar LEN are both +5% today as well. Clearly, there is a lot of pent-up interest in seeing this new interest rate environment transpire. This is before mentioning the small-cap Russell 2000 being up +4.3% over the past two sessions alone; lower interest rates would be a boon for the small banks and insurance companies listed here, too.
The Dow gathered another +463 points today, +1.09%, while the Russell 2000 led all major indexes for a second straight session, +1.98%. The S&P 500 and Nasdaq closed with lower increases — +0.32% and +0.14%, respectively — but nevertheless closed at new all-time index highs. Heady times for the market — and in August, no less!
Cisco Beats in Q4, Shares Dwindle in Late Trading
Cisco Systems CSCO kept its long, impressive string of quarterly earnings beats alive this afternoon, posting fiscal Q4 earnings of 99 cents per share, 2 cents higher than the Zacks consensus and easily ahead of the 87 cents per share reported in the year-ago quarter. Revenues of $14.67 billion outpaced the $14.60 billion anticipated, +7.6% year over year.
Cisco also ticked up guidance for the present quarter, but only very mildly, and the high-end of the Q1 earnings range at 99 cents per share is flat with the quarter just reported. Shares had been trading down nearly -2% but are now roughly flat. Shares of the Zacks Rank #2 (Buy)-rated communications tech giant are up +18.7% year to date.
What to Expect from the Stock Market Tomorrow
Two big economic prints await us ahead of the opening bell tomorrow:
Weekly Jobless Claims and the July
Producer Price Index (PPI). Initial Jobless Claims are expected to remain well behaved, sub-230K for the 10th week in a row, while Continuing Claims should be sub-2 million again, even as they grind closer — above 1.9 million for 11-straight weeks.
PPI is expected to come up a bit from 0.0% reported on both headline and core a month ago: +0.2% on headline and +0.3% on core. These would be increases the market would be able to live with; just as with a slowly creeping Consumer Price Index (CPI), which we saw on Tuesday and had ignited this most recent rally, minuscule inflationary figures are not scaring off investors in this climate.
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Cisco Systems, Inc. (CSCO): Free Stock Analysis Report PulteGroup, Inc. (PHM): Free Stock Analysis Report Lennar Corporation (LEN): Free Stock Analysis Report Rocket Companies, Inc. (RKT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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