00:00 Speaker A
Now time for some of today’s trending tickers. We are watching crypto stocks, homebuilders, and the KBW Bank Index, three asset classes moving off the back of the Fed. First up, crypto stocks soaring amid the risk-on rally. This comes after a tough week for the asset, but Powell’s comments sparking a rebound in digital assets and in the stocks that are associated with digital assets here. You know, we, Allie is still with me here. And Allie, you know, we’ve talked to a lot of investors who have said even though there’s one line of thinking that crypto doesn’t correlate to anything, there’s certainly another line of thinking that there is an interest rate sensitivity there and that rate cutting would be good for those types of companies.
00:56 Speaker B
Yeah, and heading into this week, there had been a lot of commentary whether or not Bitcoin was reaching bubble territory and whether or not these crypto assets were rising a little bit too quickly. But we’re seeing this risk-on rally today. We’re seeing that reaction directly correlated in Bitcoin, which is the largest cryptocurrency. We are now up over 117,000 a coin. Before Powell’s speech, we were closer to 112,000. So that just goes to show how quickly we’ve been rising here. Now over the past five days, we are still off around two tenths of a percent and we’ve really been struggling to get over $120,000 a coin. That has been really branded as this, uh, technical threshold by strategists, and we haven’t really been able to hit that mark here. But you talked about those crypto adjacent companies. We’re seeing names like Riot, Circle, Hive, Galaxy Digital surging today. Riot is up 9%. Circle, which is really benefited from the stablecoin boom, that’s also approaching double digit gains. So all in all, just for crypto stocks for the speculative trade at large, we are seeing this rally across the board.
02:52 Speaker A
Yeah, and speaking of rate sensitivity, another group that we got to talk about, homebuilders. Homebuilder stocks are also getting a lift here because the sector has traditionally been the beneficiary of rate cuts. Today’s gains follow this week’s better than expected news on housing starts for July. You know, Allie, we’ve been talking to a lot of folks who are sort of desperate for mortgage rates to come down to unlock the housing market.
03:35 Speaker B
Yeah, the housing market just has been completely stuck. And you’re right. Now that we have the expectation, at least on the part of markets, that we could be seeing rate cuts at a quicker pace, or at least in September, that is an encouraging sign when we think about borrowing costs for these, um, homeowners or would-be homeowners. You’re seeing home builders across the board, uh, up. We have Lennar up 5% today. You have DR Horton also up around the same amount. Uh, KB Home is up, uh, 7% at this point. Toll Brothers up 6%. So across the board here, you’re seeing those gains even in some of these home improvement companies, like Lowe’s, Home Depot, we recently heard from them when it comes to earnings. They are up today. And, uh, they they did reference the fact that their business is so correlated with mortgage rates. And Home Depot said that as mortgage rates have ticked down a little bit from the highs that we saw earlier this year, that helped some of that activity. So this is only going to be a benefit for a lot of these companies that are tied so closely to the economy and really the purchasing behavior and patterns on the part of consumers.
05:35 Speaker A
And finally, let’s talk banks to the KBW Bank Index up nearly 3% on pace to hit its first record since 2022. Small caps, regional banks getting a boost as well from these rate expectations.
06:03 Speaker B
Yeah, now I was just talking about small caps how they’ve been rallying, regional banks. I mean, it’s pretty much the same story there. And they benefit from a few things when it comes to lower interest rates. One is that regional banks, they heavily rely on deposits for funding. And when rates are high, they often have to pay depositors more in order to keep that money in the bank. So a Fed rate cut eases some of that pressure. And similar to what we saw with homebuilders, it also is encouraging that lower rates means cheaper borrowing costs for those homeowners, for businesses, and that just means more activity for these banks at large. So the big banks doing well, but the regionals really a standout here too, Julie.
07:12 Speaker A
Yes, in focus. Thank you so much. You can scan the QR code below to track all of the trenders on our trending tickers page.
