Things You Need to Know
- NVDA, NVDA, NVDA – need we say anything else?
- MSFT, META & GOOG all report after the bell.
- Bonds a bit higher, keeping yields under 4%.
- Oil churns and the Buy the Dippers are alive and well in Gold.
- JJ takes the stage at 2:30 pm.
- Try the Classic Pasta Faggioli
Stocks once again ended higher – yet there was a noticeable divergence……and that divergence was driven by BIG tech vs. the rest of the market….and you can see it here.
The Dow ended the day higher by 161 pts, the S&P up 15, the Nasdaq added 190 pts while the Mag 7 added another 430 pts….the losers were the Russell – down 14 pts, the Transports down 105 pts and the Equal Weight S&P lost 70 pts….that is KEY…. Consider what the market is telling us when the S&P ends the day up 0.25%, yet the Equal Weight S&P loses 1%!
Just to be clear – when we see such a divergence in the S&P vs. the Equal Weight S&P it suggests extreme concentration in market gains — driven almost entirely by a handful of mega-cap stocks, while the vast majority of the index loses value. The bottom line is this: Gains were not broad based – they were concentrated in ‘a few AI/Tech titans’ while the rest of the market was weak and that just might be a bit of a warning flag to procced with caution.
Now, remember when I said that all you need is one good headline (or one bad headline) that causes the algo’s to focus on anything positive (or negative) – well – they chose to focus on the tech positives…..and here they are –
The NVDA GTC Conference (the Superbowl of AI) held in Washington, DC is one positive…. And they made a ‘flurry; of new announcements…..
They are collaborating with ORCL to build the DOE’s largest AI supercomputer.
They announced the first AI native 6G wireless stack built on its Aerial platform. Just fyi – a wireless stack is the complete software and hardware architecture that defines the new 6th Generation of cellular networks. It is defined as the ‘brain and nervous system’ of future wireless networks.
They are partnering with UBER to scale and power the next generation of robotaxis and autonomous fleets.
They introduced NVQLink – it couples quantum computing with GPU computing. – accelerating quantum supercomputers.
And if that is not enough – they introduced DGX Spark – a compact AI supercomputer for developers – democratizing high performance AI for global developers.
They announced their Omniverse Technologies division is being adopted by leading US manufacturers, software developers and robotics firms.
And they launched ConnectX-9 Super NIC – a next generation interface card.
In the end – these announcements emphasize NVIDIA’s role in U.S. AI sovereignty – Period. And this morning it will become a $5 trillion company.
Next – we heard President Trump made some remarks suggesting that he would consider talking to Xi Xi about – China having access to a downgraded version of the NVDA flagship Blackwell chip (something he has done before) and that sent NVDA (and big tech) surging even further and it is now knocking on the door of being the first $5 trillion company ever. It closed last night at $201.03 – it needs to kiss and penetrate $205.36 to make history….and just fyi – it is trading at $207.30 in the pre-mkt…Capisce? So, consider that done!
Third – we are awaiting the earnings from 5 of the Mag 7 over the next 2 days…. MSFT, META & GOOG tonight, while AAPL & AMZN report tomorrow. And clearly the excitement is building – and I do not expect any of them to disappoint at all, but truth be told – it will be all about the guidance and the market is expecting that guidance to be robust……Period the end. (No negatives here).
And just fyi – of the 29 earnings reports before the bell – only 3 missed, only 3…so 89% of the reports yesterday morning BEAT on the top and bottom lines and offered upbeat guidance….…What does that tell you? I’ll tell you this – It doesn’t scream ‘fire in the hole’! But it also doesn’t just mean you keep buying haphazardly.
And then at 2 pm – we will hear from the FED – and there isn’t much they can say that will change the course of history….expect to hear that they are cutting rates by 25 bps and that they expect to do it again in December….What the market wants to hear now – is what are they planning on doing in the new year? Now the market IS expecting ongoing cuts in the new year – they just want to hear when JJ thinks they will happen…Will it be January and March or will it be later in the spring/summer? Again – it’s all about the guidance and he is not expected to offer much in terms of clarity….
That’s all you need to know about why TECH surged….but what you need to consider is why did 8 of the 11 major sectors come under pressure…..Real Estate taking the biggest hit down 2.2%, Utilities – 1.65%, Energy and Consumer Staples down 1%, Industrials – 0.7%, Financials & Healthcare – 0.6%, while Communications lost 0.5%.
And that just might be because they are exhausted and need to consolidate – and investors just might be taking a little ‘off the top’ – something we have been discussing…. And something that should surprise no one.
Now bonds have rallied a bit and that is keeping yields in check. The 10 yr remains below 4% at 3.98% while the 30 yr is yielding 4.54%. Shorter duration 3- & 6-month bills are yielding 3.69% and 3.60% respectively. (remember those are annualized rates – so you have to roll them over for 12 months to get that rate).
Oil is trading at $60.30 – again within the $55/$62 trading range. There is nothing new in the oil patch that you don’t already know.
Yesterday gold was all over the place…. traded as low as $3,889 in the early morning to a high of $3969 only to close at $3952. The manic behavior a direct result of the sell off we witnessed over the past week….as it tries to find its ‘chi’.
This morning the ‘buy the dippers’ are busy at work – taking gold up $75 to $4,028. News that Russian consumers and hoarding gold is just another reason for the ‘dippers’ to jump on board after the 12% pullback. While the bump is nice – my gut says that we will test lower before we challenge the highs again.
This morning US futures are churning higher…. Dow futures are up 36 pts, the S&P’s up 13, the Nasdaq up 90 and the Russell is flat. So far we have already heard from 12 more companies and only 2 of them disappointed…. (AVTR & GNRC). We still have 15 more to go…. But let’s be honest – all the chatter is about what we are going to hear tonight after the bell.
European markets are mixed…. They too are digesting the latest European earnings season as they also await the FED’s decision.
The S&P closed at 6,890 up 15 points but not before piercing yet another new century mark – to trade as high as 6911. And if futures remain positive – we will open in the new century at 9:30…. Now it will be interesting to see what happens today – will we see more divergence or not? Keep your eyes on the Equal Weight S&P to get a sense of the market mood.
Here is your countdown.
It is now 29 days of the Gov’t shutdown – with no end in sight.
0 days until the FED announcement.
31 Days until Official Black Friday.
57 Day until Christmas
63 Days until the ball drops in Times Square.
Let’s review your plan. Call me for a complimentary, no-obligation portfolio analysis: 561-931-0190.
Take good care,
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
While considerable effort has been invested to ensure the accuracy and dependability of the information presented, we must clarify that we cannot guarantee the accuracy of third-party information. Our usual sources for third-party data include channels such as Bloomberg.
Pasta Faggioli
This is a great dish – simple to make and always a favorite. Pasta Faggioli is essentially Pasta & Beans. Anything else is just an addition to the basic dish.
For this you will need: ½ box of Elbow Pasta, Cannelloni beans, water, olive oil, garlic, onions, celery, carrots, can of crushed plum tomatoes, Chicken Broth, pancetta, a parmegiana cheese rind and s&p.
Bring a pot of salted water to a rolling boil.
Begin by sautéing some crushed garlic in olive oil on med heat – careful not to burn the garlic – Now add in the diced Pancetta – not too much just enough to give it some flavor.
Next add the diced onion, carrots and celery – sauté some more – maybe 15 mins.
Next – in the same pot add 2 cans of Cannelloni beans – do not strain. Add chicken broth, crushed tomatoes and 1 can of water and the cheese rind– season with s&p – bring to a boil and then turn heat to simmer. Stir occasionally.
Now – boil the pasta for like 6 mins…it will be undercooked. Then strain and add the pasta directly to the mix.
If you need to – add a mug or two of the pasta water if it sucks up all the sauce. It will only need about 3 more mins to cook… as it will continue to cook even when you turn off the heat… so be careful… Serve immediately in warmed bowls with plenty of fresh grated Parmigiana cheese.
Buon Appetito!