Wall Street Breakfast With Steven Cress (Generac, Amazon, Powell, Kroger)

Generac (GNRC) surged after securing a $2.4B long-term generator supply deal with Amazon (a Quant Strong Buy). GNRC had experienced significant valuation compression since June, but Amazon's order and improving forward metrics signal a potential inflection point. Quant gives a hold on GNRC and Powell (POWL), but strong forward revenue and EPS growth, plus record backlogs, suggest upside as AI/data center demand validates sector strength. Kroger (KR) remains a quant hold due to weak current growth and earnings, despite some improving forward metrics and strong free cash flow.

Yesterday we were talking about the Fed meeting. They did indeed hike rates as expected. Steve, what are you looking at this morning?

Really exciting day yesterday for traders and investors. And on the back of that twenty five basis point hike by the Fed, I can largely say that most traders expected it, especially the Bond vigilantes, the interest rate traders, roughly ninety-two percent saw the probability of rates going up twenty five basis points. I think what was a little bit of a surprise was that forward guidance that there could be another twenty five basis point hike. So initially the expectation was and from history when a hike does take place, the market actually trades up on the day of the hike. And it was trading up, but when that commentary came out from the Fed chair that there could be possibly another twenty five basis point hike, that projection from the dot plot. I don't think there was the anticipation that there could be another twenty five basis point hike, and they clearly indicated that yesterday. So the market rolled over a little bit, but the good news coming out of that rollover yesterday was that many of the stocks that had been hit hard starting in May and June, which were typically AI stocks, semiconductor stocks, industrial stocks that benefited from AI, have basically been trout from June to recent days. There's also an important announcement today that came out from Jenarack that kind of confirmations the existing demand for the sector. So I am gonna highlight Generac ( GNRC ) the stock today because it is up significantly.