Breakfast News: Fed Dot Plot In Focus

Breakfast News: Fed Dot Plot In Focus

1. Markets Look Beyond Fed Rate Cut

The S&P 500 and Nasdaq closed modestly lower, with futures contracts reversing the losses, following the 0.25% interest rate reduction from the Federal Reserve, with the updated 'dot plot' only guiding for one cut next year, with higher inflation and economic growth projected.

• "Next year's dot plot is a mosaic of different perspectives and is an accurate reflection of a confusing economic outlook": Seema Shah, chief global strategist at Principal Asset Management, explained how labor market uncertainty and data measurement concerns makes the future rate path clouded.
• Change of statement language shows Fed focus: The statement added "downside risks to employment have risen" along with "inflation has moved up," in a nod to the data and sentiment shift over recent weeks.

2. China Drops Google Android Probe

The Chinese antitrust case against Alphabet (GOOG 1.27%) and the dominance of its Android operating system has been dropped, in a move some see as political due to the ongoing negotiations between the U.S. and China.

• 16% of total revenue comes from the Asia Pacific region: Alphabet doesn't split out China sales from APAC, but it still provides a boost for the company to have the case dropped, allowing Chinese phonemakers to continue to use its software.
• Recalibrating focus of regulatory firepower: The move shows flexibility from China when it comes to trade negotiations, although Nvidia (NVDA 0.34%) remains an ongoing target for Chinese authorities.

3. After-Hours Earnings: CBRL Drops Almost 10%, Bullish Jumps

Cracker Barrel (CBRL -5.09%) fell close to 10% after the closing bell following a mixed bag of quarterly results, with a weak forecast as the business struggles to modernize.

• "We continue to see consumers seeking value": General Mills (GIS 1.16%) posted a solid quarter and stuck to its outlook, despite CEO Jeff Harmening noting customers being cautious from economic uncertainty.
• Trading volume jumped to $179.6 billion, up from $133 billion last year: Bullish (BLSH 5.44%) rose 2% after the market closed with earnings beating expectations, in part thanks to increased client activity and momentum in the crypto market.

4. What to Watch on Thursday

Longtime Stock Advisor recommendation FedEx (FDX 2.63%) reports following the closing bell, with investors keen to see if cost control can boost earnings like last quarter, or if tariff complications get in the way. Plus, around 1 PM Eastern, we'll be revealing our latest stock pick to SA members!

• From data to dinners: Rule Breakers rec FactSet (FDS -3.95%) and Darden Restaurants (DRI -4.16%) report before the market opens, with analysts expecting revenue growth of 5.5% and 10% respectively.
• Only missed analyst revenue estimates twice in the past two years: Lennar Corp (LEN -4.18%) releases Q3 results after the market closes, with order and land cost trends along with mortgage rate sensitivities being closely watched.

5. Meta Unveils Updated AI Ray-Bans

Meta (META -0.26%) unveiled updated Ray-Ban smart glasses featuring a built-in screen capable of answering queries using Meta's AI services.

• "AI should serve people, not just be something that sits in a data center": CEO Mark Zuckerberg said the superintelligence team will use the glasses as a vehicle going forward, with the potential for both unique and functional feature development.
• "Does it survive first contact with the market is the real question": CTO Andrew Bosworth explained how consumers would show if the product is to be a success, with price a concern given the $799 glasses can cost as much as the smartphone they need to be paired to.

6. Your Take

What are your thoughts on smart glasses? Do you agree with Zuckerberg that they're "the ideal form factor for personal super intelligence"? Discuss with friends and family, or become a member to hear what your fellow Fools are saying.