James Thorne: FED NEEDS TO CUT 100 BASIS POINTS NOW

**Michael Zuber** (0:02)
Not sure if you have heard of James Thorne. If you haven't, you might want to look him up on X. He is a chief market strategist and holds a PhD in economics. He is out with a very important message, and he is not shy about his opinion. James Thorne says, and I quote, The Fed needs to cut 100 basis points right now. Immediately. ASAP. A 100 point cut gets us to neutral, or what economists call R-star. James went on to say that he thinks R-star could be as low as 2.75.
Yes, I have not heard anyone other than James calling for the Fed to A, immediately cut rates and B, cut them by 100 basis points. Now, I am doing a lot more research on James. James is a very large ex-contributor.
As someone who holds a Ph.D. in economics, he has over 100,000, I guess it's called followers. And he is very loud. Just this morning, he put out another post talking about real estate. Real estate being in a recession, I might argue, depression, says that the real estate market is the closest thing to a sure thing or a sign that the Fed is too restrictive.
To which transactions at 4 million, maybe 3.9, it used to be at, what, 6.2, something you and I have talked about for years. What I think James has—let's just say I think James is wrong. I think 100 basis point cut is highly unlikely. Right? The unemployment rate currently sitting at 4.1.
We've got lots of earnings above expectations in raising.
You've got inflation that is at a minimum sticky, if not rising.
I think I haven't thought about R star in a while. But to peg R star below 3 percent?
I don't know. That seems, the economy seems on the surface anyway. Be doing okay. I don't know. What do you think? What do you think? A hundred basis point cut.
I mean, just, I mean, really? I mean, what would that do? We did cut, what, 75 basis points and mortgage rates went up. I have a sneaky suspicion if the Fed slammed through a hundred point cut or even 50 Let's just say he got half of what he wanted, 50 And I, mortgage rates might go up, right? That's what happened last time. Let's not forget that a Fed cut on overnight rate does not guarantee anything. But wow, crazy. All right, we did get some, let's run through a bunch of earnings. We got a bunch of tech earnings. We got some retail earnings. The big one of the day is obviously NVIDIA. NVIDIA simply crushed earnings again, beat top line, bottom line, raised guidance. They did 96.2 billion in the quarter, which means, which means seven days a week. Every 24-hour period, NVIDIA is doing a billion dollars. There's roughly 90 days in the quarter, sometimes 91
Let's just say there's 91 days in the quarter. I didn't count.
They, they did 96 They did a billion dollars every Saturday and Sunday, every Monday and Tuesday.
That's a lot. Also, they raised guidance, talked about demand out till 28
It's good to be an NVIDIA employee, NVIDIA shareholder, but they're not the only ones. We got a lot of tech earnings that just simply crushed it. Salesforce beat top line and bottom line, raised guidance. Tell me you've ever heard that before. They did see a strategic gain in their entropic investment. So they reported a $2.6 billion gain. Okta beat top line and bottom line. It says, AI security opportunity is still very, very early. Absolutely. You've heard me talk about security systems or security software quite a bit over the last several years. That is the part of software that people very, very rarely stop investing in. And I expect anything in security, especially software, to do quite well as we are entering a world where AI becomes a combatant. And you need to stay up to date with your security. CrowdStrike, they did have what they called their mythos moment. They beat top line, bottom line, raise guidance. Mythos, I guess. Mythos guidance. Mythos moment, sorry. Best quarter in company history. Wow. HP beat top line and bottom line, raised guidance. Fastest growth in years. Best buy beat top line, bottom line, raised guidance. Same store sales up 4.1 percent. TD Bank, Canadian Bank, beat top line and bottom line. Dollar General, not to be outdone. Beat top line, bottom line, raise guidance. Guys, are you sensing a theme? Are you sensing a theme? Beat top line, bottom line, raise guidance. Have I said that like 17 times today? Traffic at Dollar General is up 2 percent. Average transactions up 1.5 percent. Kohl's crushed earnings. However, it was a dirty, dirty number. They did that because of $150 million tax refund, a one-time event. Lower earnings shoppers are feeling the pinch, according to Kohl's. Let's talk about some Fed speak.