Steve Sosnick, chief strategist with Interactive Brokers, joined Cheddar News to discuss Monday's light trading session ahead of debt ceiling discussions on Tuesday. Sosnick also weighed in on what the Federal Reserve could have in its sight.

<div class="block">Steve Sosnick, chief strategist with Interactive Brokers, joined Cheddar News to discuss Monday&#39;s light trading session ahead of debt ceiling discussions on Tuesday. Sosnick also weighed in on what the Federal Reserve could have in its sight.</div>

Closing Bell

Analyst Breaks Downs Monday's Trading Session Ahead of Debt Ceiling Talks

Steve. So joining me now is the chief strategist to interactive brokers. Steve. Always good to see you these gains, I guess, will say today kind of like volume still. What do you make of the market? Hi, Kristen, great to see you as always. Um Basically, it's another one of these days that fits in the pattern of what we've seen where we've had sort of very modest movement. Um You know, that it's certainly happier for most people to see it up than down but not, you know, not in a major way. And when we have seen a little bit of uh a bit more rise out of the, out of the NASDAQ because it's being led higher by the select group of, of stocks that are leading these mega cap tech stocks today. Um Meta and NVIDIA uh did most of the heavy lifting, but in general that that's been part of the theme and it's sort of been a different big cap tech to take the lead, which is why they've outperformed year to date and over the past couple of weeks, you know, I think it's fair to say in the wake of COVID there's been so much uncertainty, at least since the start of 2022 Steve as a long time market strategist. I think it's fair to say there's been a lot of uncertainty and so can investors trust this melt up that we've seen in the stock market? Um I, I it's becoming a little tricky the fact that we just sort of sitting here. Um, you know, I, I guess the one positive could be, maybe we actually really have found fair value and we've got some lasting equilibrium where prices, where prices remain stable. Um, over time that tends not to, that tends not to be the case. Um, now the, the positives are we, we continue to see, um, uh, you know, good buying, sometimes aggressive, sometimes more muted buying in the market leaders and they are the ones pushing the big, the big indices higher. The problem with that is, it's not really across the board distributed and we do like to see more broad based rallies. The problem is when you have a narrow group of leaders, it's, it's quite seductive. You want to sort of see them follow higher. But the problem is, you know, you want a broader base, it's like anything you want a broader foundation. And the problem is if everybody's piling into those same names, what happens if people stop piling in or worse, start exiting, um, you know, without any sort of pick up from the other, from the from the rest of the call it the S and P 500. Um, you can find yourself running into trouble and that's the risk factor in the market right now. You know, is it still the case? Uh, Steve, I guess, debt ceiling and potential on the side, which could cause some volatility in these next few weeks that the stock market is still just basically waiting on the fed to either pause down the road, continue hiking or cut rates. And what is your outlook, your forecast saying for what you expect the fed to do? I, I expect the fed to, to pause. I think we may have seen the peak if not, maybe 25 basis points, but I really don't, don't see another rate hike in the cards. But I also don't see the cuts. The, the fed funds futures market is pricing in rate cuts, um into, into the, uh, into the end of the year. They're looking at 25 basis points largely predicted by, by September and then 2 to 3 more cuts by, by, you know, the December January period. There's no reason for me to believe that, you know, I like to say peak and pause don't mean pivot. So we may have hit the peak rates. We may see the fed, hit the pause button. But there's nothing really that says that the fed is going to turn around and start cutting rates just because they've finished raising them um, what they, they have left the door open a little bit saying, ok, we'll cut them if circumstances dictate but consider what those circumstances would be. We would need, you know, debt crisis recession. I don't wanna, I don't wanna elucidate all of them, but because I don't really feel like being that negative but it would take something negative for the fed to want to cut rates. We heard, uh, Rafael Bostic say this morning that he does not expect rates and that is commensurate with what all the other fed saying. They don't want to cut rates until we're sure that inflation is whipped, which it's not right yet. It's better but it's not, it's not fully over and, you know, until or unless there's really a reason to do so, they're just not going to turn around and cut. There's no historical precedent. All right, Steve Sas chief strategist at Interactive Brokers, the big fed debate rages on. But stocks again melting up today, Steve. Thank you.