Morning Watchlist: Saturday Edition
A quick note from Behind the Markets
It's Saturday morning, and the thing this whole quarter pointed at finally happened. On Wednesday at 2:00 PM Eastern, the Federal Reserve raised rates for the first time in three years — a quarter point, to 3.75%–4.00%, on a unanimous vote, with one more hike penciled in. Chair Warsh kept it to three words: "inflation remains elevated."
The Dow dropped 631 points on the news. Then Thursday, the market did what markets do once the anvil everyone watched finally lands: it exhaled. Stocks bounced, the fear gauge collapsed toward 16, and oil eased back toward $100 a barrel as Saudi Arabia's damaged East–West pipeline moved toward restoration.
Saturday is grading day around here — every call from the week, marked against the tape, misses included.
One honest scheduling note first. We went to press Thursday midday, so Friday belongs to you, not to us: the Bank of Japan's overnight decision, the quadruple-witching close, and the index funds' final forced sales of The Trade Desk all landed after our deadline. You'll find them in your Monday checklist below — not pretended into the past tense.
Four stops on the tour. Let's get into it.
1) The Hike Landed. So Did the Bill.
We built last Sunday's edition around one idea: when the Fed moves, some businesses collect a raise and some get handed a bill. Wednesday sorted everyone into their column.
W. R. Berkley — Sunday's Buy at $70.05 — is the raise. The specialty insurer's float, that pile of premiums parked in bonds between the collecting and the paying, started earning the new rate the moment Warsh finished speaking. The stock traded at $70.34 Thursday, within pennies of our flag, still around 14 times earnings against the S&P's 21. One wrinkle worth noting: Mizuho trimmed its target to $72 this week, and the average analyst target still sits below the price — the targets-chasing shape we flagged on day one. The bond portfolio reprices faster than the analysts do. Still Buy.
Houlihan Lokey — Wednesday's Buy at $137.82 — got the bill first. It closed Wednesday at $130.58, down about 5% from our flag, the worst grade on this week's card. We won't sugarcoat it, because we wrote the risk in the original call: restructuring is only a fifth of Houlihan's revenue, and the deal freeze bites the bigger corporate-finance side quarters before the workout desk can invoice the distress. The market spent the week pricing the freeze. But notice what Wednesday actually did — it made 5% money official, with another hike penciled in. The ice storm got colder. Tow trucks bill slowly, then all winter. Still Buy — the drawdown we're sitting through is the risk we named, not a new one.
Nasdaq — Wednesday's other Buy, at $91.57 — closed Wednesday at $88.76, down about 3%. Here too, the tape ran straight at our named risk: a hawkish Fed can slam the IPO window, and the window's biggest test — Anthropic's expected October debut on Nasdaq's boards — is still ahead. The listings flywheel doesn't care about one week of tape; it cares whether the parade shows up. Still Buy. Watch the listing, not the wiggle.
2) The Essay Week Ended With the Steel Higher
Rewind to Monday, when Anthropic CEO Dario Amodei's "pace the frontier" essay knocked the whole AI complex over and handed us the week's cleanest test of a thesis.
Micron — Tuesday's Buy, flagged near $925 after the essay took it down 5% — spent the week doing exactly what we argued it would: trading on the steel order, not the op-ed. By Thursday midday it was at $976, up about 5.5% from our flag, rallying with the memory group as oil and yields eased. Nobody canceled a memory order this week; SK Hynix still says the shortage runs toward the end of the decade. The real exam is Micron's own report on September 30 — a cheap multiple on peak cyclical earnings is memory's oldest trap, and we said so going in. Still Buy.
Check Point — Wednesday's Buy at $138.50, our face-value seat in the sold-out cybersecurity theater — closed Wednesday at $137.69, essentially unchanged while the momentum names it refuses to be gave back some of Monday's pop. Balcony seats don't swing much. That's the point of them. Still Buy.
And now the grade we owe you on the one that ran off. AeroVironment — Tuesday's Watch near $144 — traded at $163.75 Thursday midday, up almost 5% on the day and roughly 14% from our flag. The war tape did some of the lifting, and so did real news: on Tuesday its BlueHalo unit won a U.S. Air Force space-defense award worth up to $99.8 million. So let's be honest about what happened. We named our entrance in writing — record bookings converting into raised earnings guidance, or a washout below $135 — and neither printed. The stock ran anyway, without us. Discipline has a price too, and this week it was fourteen percent. What hasn't changed: at roughly 44 times forward earnings with this year's guidance still pointing slightly down, we'd be paying a growth multiple for earnings that haven't grown yet — the exact shape we've refused all quarter, from Tenable to Okta. A missed rally costs nothing but pride. A chased multiple can cost real money. Still Watch, entrance unchanged.
3) The Money Kept Talking
Monday's theme was that companies tell the truth with money more often than with words. The follow-through was kind to it.
Zimmer Biomet — Tuesday's Buy at $93.50, paired with Apollo's reported ~$20 billion pursuit of J&J's hip-and-knee unit — closed Wednesday at $96.78, up about 3.5% and the best-behaved Buy on the week's card. The analyst crowd we described as absent is starting to file in: several firms raised targets on the strength of U.S. hips and the surgical-robot line. The deal was the appraisal; demographics remain the thesis. Still Buy.
Adobe — Monday's Buy near $249 — traded at $250.36 Thursday, flat and arguing with itself: BMO and Wells Fargo have lifted their targets to $270 since the earnings report, while Morgan Stanley stays at Sell. A billion-user franchise at roughly ten times this year's guided earnings is still a coin with those two faces. We took ours. Still Buy.
The rest of the young shelf, quickly.
OPENLANE, Monday's Watch, held right at our $35 flag — the $30 entrance we named would still be the price of admission. Still Watch.
OneSpaWorld, Monday's Buy at $22.40, eased about 3% to $21.69 on no news we could find — 21 straight record quarters don't reprice in four days. Still Buy.
Global Payments, Thursday's toll-collector Buy at $88.98, slipped about 3% to $86.42 — at roughly six times guided earnings, boring remains fine. Still Buy.
Etsy, Thursday's Watch at $74, sat at $73.74 — and Bank of America's $105 target is now the loudest voice in a crowd we're happy to let argue while we wait for actual merchandise volume. Still Watch.
And the week's one Sell is earning its keep already: Coinbase, flagged Thursday at $172.11 after the CLARITY Act died in the Senate, closed Wednesday at $164.51 — about 4% below our flag — before bouncing with bitcoin near $76,000 on Thursday. The dining room still doesn't have its liquor license. Sell stands, for holders.
4) The Builder Confessed. Friday Holds the Rest.
Lennar reported Wednesday night, four hours after the Fed, exactly as scheduled — and the confession read the way builder confessions do at 6.85% mortgages. Revenue fell about 9% to $8.05 billion, short of estimates. Earnings missed. Operating margin sank to 5.5% from 7.9% a year ago — the incentives treadmill, speeding up — and management cut its full-year delivery target, saying out loud it is "compromising margin in order to maintain volume." Our September 13th entrance required two things at once: margins finding a floor, and a friendlier Fed. Wednesday delivered neither — the margin fell and the Fed hiked. Oddly, the stock shrugged: $78.51 by Thursday midday, slightly above our $77.20 flag, the market apparently deciding maximum gloom was already priced. A shrug is not a floor. Still Watch — and Thursday's housing starts explained the whole standoff in one report: single-family starts rebounded 7.6% while total starts fell 2.6%, because builders can still move houses. They just can't keep the profit.
Roblox got its verdict-shaped event Thursday: Brussels unveiled the KIDS Act for real. The text bans social-media accounts under 13, gives 13- and 14-year-olds supervised "mini accounts" with one-hour daily limits, and pulls online video games, video sharing, and AI chatbots into the same under-18 safety regime — addictive-feed bans, age verification through certified independent systems, no personalized ads for minors. Read closely, the under-13 lockout is written at social media, while games face the safety-and-verification rules — closer to our stainless-steel-kitchens reading than to the kill switch. The market read it the same way: after dropping 5.6% on Wednesday's leak, the stock sat at $47.64 Thursday, a hair above Wednesday's close — no second leg down when the real text arrived. But this is a proposal entering months of negotiation, and drafts harden as easily as they soften. Still Watch, entrance unchanged: a final text that preserves the child-friendly lane, with losses narrowing — or a washout that pays for the wait.
The Trade Desk spent its last week in the index above our flag, not below it: $14.39 Thursday, up about 3% from the $13.97 we marked on Sunday. Five days of forced selling produced no washout through Thursday — which is itself information — but the loudest hour was always going to be Friday's quadruple-witching close, after our deadline. The rule we wrote stands: nobody buys before the bell, and only if a washout prints and holds past Monday the 21st. Still Watch.
And the Bank of Japan decided Friday in Tokyo — overnight, after press time. That decision is the entrance bell we named twice: for Aflac, which drifted up to $116.87 Thursday, stubbornly above the $110 entrance we asked for, and for Mitsubishi UFJ, whose last Tokyo print we could verify — ¥3,661 at the prior Friday's close — sat about 1.7% above our flag with a hike roughly 90% priced. A 90%-priced hike was never the edge; the reaction to it is. Both still Watch.
Friday morning's newborns — GATX at $177.63 and SLB at $52.30 — are too young to grade honestly, so we won't. SLB traded at $52.16 Thursday midday, at the flag. First report card next Saturday.
So, your Monday checklist, in order. First, what the Bank of Japan actually did, and what the yen did about it — that grades the Aflac and Mitsubishi UFJ entrances. Second, The Trade Desk's Friday close and Monday-morning tape: washout, hold, or neither — the entrance lives or dies on the 21st. Third, whether Thursday's exhale held into the weekend — oil near $100 with the Saudi pipeline restoring is the swing input for half our energy shelf. Fourth, any follow-through on Lennar's shrug; a builder that stops falling on bad news is worth a note in the margin. Fifth, circle September 30: Micron reports, and a 5.5% winner gets its real exam.
Before You Go
That's the watchlist. A record diesel bill and the landlord of the boxcars, a 50-billion-barrel fixer-upper and its contractor, and a fence around the playground that may favor the kid who already built the gates. One theme this morning: the Fed did the most-telegraphed thing in years, and the week's best setups were filed under freight, plumbing, and playground rules.
Some housekeeping. Lennar confessed Wednesday night: revenue down about 9% and short of estimates, earnings of $1.19 a share against $1.29 expected, and operating margin down to 5.5% from 7.9% a year ago. Our September 13th entrance required margins finding a floor and a friendlier Fed — Wednesday delivered neither. Still Watch; the full grade comes in tomorrow's review.
And mind today's closing bell. It's quadruple witching, and the index funds selling The Trade Desk ahead of Monday's S&P 500 deletion must finish by the close. Our rule from September 13th stands: nobody buys before the bell — and only if the washout prints and holds past the 21st.
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Written by Behind the Markets