Woods: October might bring market volatility from election and seasonal headwinds

Can you top recalibrate? I cannot top recalibrate. My word is dissent now. It has two meaning. Dissent as we are going down to this soft landing. We're landing the plane. But also, one thing that struck me about yesterday was the word dissent when we got one of the Fed chairmen to vote against cutting 50 points. We went 25 points. That was kind of telling. They're usually in line. It's not until the Fed minutes that you see what, you know, the chatter was in the room. And I can't wait for these Fed minutes. They're going to be epic. But it was something saying we weren't all in agreement, and I'm going to put my vote on the record. So Michelle Bowman voted against it. And I think we're going to hear a lot of Fed chatter over the next few weeks that will keep this market volatile. But right now, that soft landing, that dissent, it looks like we're off to a nice start. So let me ask you, why do you think Fed chatter is going to make the market volatile? I mean, we got the signal from Jay Powell and also from the summary of economic projections that we're going to get another 50 basis points of easing this year. So what do you think another Fed official is going to say that's going to shake up the market? Well, there's going to be a lot of talk about what happened in that room and why they went the way they did. We've speculated more on this 25 versus 50. The chatter was unbelievable. I've never seen one like this. So we think that he just used the word recalibration and all of a sudden everything's fine. No, the financial media are going to have fun with this. We have seasonal headwinds, you know, and we've avoided those nicely. And then October, with an election season, the headlines are going to be great. So we're going to get Fed headlines. We're going to get election headlines. So I think that dissent is going to play out a little bit more as we go forward. What do you make of the market action? Yesterday, the markets closed lower with the exception of the Russell, finished fractionally higher. This morning, it seems like we're kind of off to the races. And again, it's the Russell that's the leader. I want to ask you about the market action you're expecting today and specifically that cyclical small cap trade that people have been talking about all year long, including Tom. I mean, I didn't want to put you on the spot, but you also have. Do you believe this is the moment? I don't know if it's going to reach Tom Lee's forecast of a 50 percent rise of small caps. But do you believe that there's a rally that's going to continue after today? Well, for the small caps, I do. I do believe the rally is finally here and it's going to continue and we're going to see that continue once we hit earnings season. But overall, that market action yesterday, the sell off, I didn't like how we closed. We'll see where we go today. I want to see a close, a new closing high. We've had back to back closing high intraday highs. Let's close about fifty six, sixty seven in that S&P 500 and then see if we can continue this uptrend. But right now, the price action has been choppy, but we need that breakout today. Could be the day we'll see. We've got to watch some earnings. One key earnings I'm watching is FedEx after the FedEx. You also you're actually bullish on on transports right now. I was looking at the stats. I was a bit surprised finishing not too far from their high as well. They've been steadily moving higher. So a lot of people think they're a leading economic indicator. Give me the case on FedEx ahead of earnings because it's pretty volatile after earnings. Why would you put money into it now? And overall, what's your view on transport? Well, first of all, FedEx is very volatile. So you have to be careful. It's gapped three last quarters, down seven percent, up seven percent, up 15 percent. It's at a key inflection point. I think we get a gap higher. You want to get into the name. That is a major breakout. It is the biggest weighted stock in the transportation average. It's price weighted. FedEx 300, the highest price stock. So the transports to me, it goes back to old Dow theory. You know, the things that make the things that take the industrials are making new highs. The Dow hit a new high yesterday. You want confirmation than that in the transports. The IYT, the ETF that follows the transports, it's a little less airlining, which is pretty nice. So I'd like to avoid that. But FedEx to me could kick off that breakout in the transports. And I think that will be a nice tell for this overall market. So I do want to ask you, you're saying FedEx is your pick in a slowing economy. FedEx is so levered to the economy and the strength of it. Are you worried that they're going to miss some of these estimates simply because of the slowdown that led us to that 50 basis point cut? Yeah, well, you could think about that. But over the short term, what they've done, how they've done the last two quarters, they were having struggles, you know, six, 12 months ago. They've righted the ship. I want to hear that guidance that call is going to be telling. I think that's a question you may want to ask on the call exactly what this rate cut will mean to them. I don't think it will be detrimental over the long term. I think they've righted the ship and a breakout here. And you can see a nice 25, 30 percent pop over the next six months.