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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of over 20,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

Markets fell following the interest rate decision from the Fed, with all three major indexes now lower on the week.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Fed cuts by a quarter point, indicates fewer reductions ahead

The Federal Reserve lowered its key interest rate by 0.25% to a range of 4.25%-4.50%, marking the third consecutive cut.

While widely expected, the Fed signaled a more cautious approach to future easing, projecting only two cuts in 2025, down from four in its September forecast. The updated dot plot also points to two more cuts in 2026 and one in 2027, with the longer-term neutral rate revised slightly higher to 3%.

The decision reflects the Fed’s balancing act as inflation remains above target and economic growth holds steady, atypical conditions for rate cuts.

This restrained outlook underscores the Fed’s focus on ensuring inflation returns sustainably to target, limiting expectations for aggressive rate reductions in the near term.

A dissenting vote from Cleveland Fed President Beth Hammack highlighted lingering concerns over easing policy prematurely.

Top Japanese carmakers Nissan and Honda are exploring a blockbuster merger

Nissan Motor and Honda Motor are reportedly in talks to merge, as per Nikkei, signaling a seismic shift in the global auto industry as they strive to remain competitive in the electric vehicle (EV) market.

The potential merger could create the world's third-largest auto group by vehicle sales, with an estimated 8 million units sold annually, trailing only Toyota Motor and Volkswagen. The two companies are expected to sign a memorandum of understanding soon, though both declined to confirm the report.

The move follows increased competition from EV giants like Tesla and BYD and builds on a March strategic partnership between Nissan and Honda to co-develop EV components.

However, the merger faces challenges, including political scrutiny in Japan over potential job losses and the need for Nissan to unwind its alliance with Renault.

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Starbucks union votes to authorize strike ahead of last scheduled bargaining session

Starbucks Workers United announced that 98% of unionized baristas voted to authorize a strike as they continue contract negotiations with Starbucks.

Talks resumed Tuesday for the final scheduled bargaining session of the year, aiming to establish a "foundational framework" after hundreds of hours at the table and dozens of tentative agreements.

Despite progress, unresolved labor practice cases and the absence of a comprehensive proposal addressing pay and benefits remain sticking points. Starbucks disputed the union’s claims, citing significant agreements reached during recent negotiations and expressing disappointment over the strike authorization.

This escalation comes after a period of improved relations earlier this year, following two years of tension during which Starbucks opposed the unionization movement, prompting backlash from consumers and lawmakers. New CEO Brian Niccol has pledged good faith negotiations and recently announced expanded paid parental leave, but baristas face smaller pay hikes next year amid declining U.S. sales.

Since 2021, over 500 Starbucks locations have unionized, underscoring growing employee demands for better wages and conditions.

In Other News

In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• Waymo to begin testing in Tokyo, its first international destination

• General Mills Stock Slips as Cereal Maker Lowers Full-Year Profit Outlook

• US finalizes $9.63 billion loan for Ford

• Merck to develop weight loss pill from Chinese drugmaker in up to $2 billion licensing deal

• US offers California's PG&E record $15 billion loan to bolster power grid

• Pfizer Stock Rises as Drug Giant Sees 2025 Revenue of $61 Billion to $64 Billion

• MicroStrategy, Palantir, and Axon join the Nasdaq 100

• Honeywell considers spinning off its aerospace business amid Elliott’s breakup push

• Mortgage demand drops for the first time in 5 weeks, after interest rates rise

• Bitcoin $108K all-time high lasts just seconds

• Cocoa prices climb to new record high, prompting fresh warnings about extreme volatility

• Coffee prices climb to near 50-year highs — and it may take years for the rally to run out of steam

The Second Half

There’s still a few key earnings to watch this week as well as important inflation and jobless claims data.

Earnings Reports

We will be watching earnings reports from Micron, Nike and FedEx.

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

It’s been a jam packed week of economic data so far and that doesn’t stop in the second half of the week. The key catalyst will be Friday’s PCE report, but we also get GDP data, initial jobless claims, existing home sales and consumer sentiment.

Here is the full calendar of events scheduled for the remainder of the week:

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.