(Justin Vaughn, Editor, Options Trading Report)
The tech heavy Nasdaq Composite Index led the market lower Friday dropping 2.2%, and finishing the week 3% lower. The S&P 500 slid 2% for the week, with the benchmark Dow Jones Industrial Average shedding 300 points on Friday. After a blistering run the week of the election of Donald Trump, stocks retreated, unable to sustain upside moves. Even with strong data related to a vibrant economy, including a ‘very-positive’ retail sales report, investors and traders were more focused on what Mr. Powell and company will do about a possible rate cut in December. There are concerns about President elect Donald Trump’s appointees, and his strong thoughts on proposed tariffs. “Various speeches by Fed officials show growing concern that disinflation is hitting a wall,” said Jefferies Analyst Thomas Simons, writing to clients. “But we do not think there will be enough evidence to confirm those hypotheses before the next meeting.”
Monday opened with stocks higher on both the S&P 500 and Nasdaq, with the techs and chips leading the way, while the Dow Jones Industrial Average struggled to stay even. Heavy buying again drove Bitcoin over $91,000, showing no signs of losing steam. Smaller cryptocurrencies have tagged along with the leader, with scantier gains and less volume. The attraction commanded by Bitcoin and endorsed by President-elect Trump have given investors ‘the green-light’ as the security surges daily. Tuesday as the market opened, stocks charged ahead, fueled by hefty moves in technology stocks, highlighted by Nvidia’s big projected earnings release at Wednesday’s close ( reported by analysts and economists to be better year-over-year and quarter-over-quarter). The Nasdaq Composite jumped 195 points. With the earnings season coming to an end, over 460 reporting companies have announced earnings. According to LCEG, 76% of those companies have beaten forecasts. The Magnificent Seven, other big techs and chip makers have dominated and have driven the index (Nasdaq Composite) to record highs, taking a few ‘breaks’ in the sizzling bull market. Even Geopolitical tensions, of which there are many worldwide, have not deterred the market as stock buyers have taken few breathers. Middle East tensions were heightened as Ukraine stepped up hostilities as it launched long range missiles on Russian positions, having been given the ‘go-ahead’ by President Biden. U.S. bonds and gold were active as the ‘safe haven’ aspect comes to bear as war efforts cause financial worries. Central Banks continued their buying of gold, now resting at $2,622.00 a troy ounce. U.S. consumers have shown a demand for gold bullion, with Costco stores now retailing the commodity with good sales success.
Bitcoin was the ‘star’ of the day Wednesday, with aggressive buying pushing the coin to another new high of $94,963. Evidence of profit taking and Fund buying also surged the coin. U.S. Bonds edged higher as the 10-year Treasury yield finished at 4.406% up from 4.378% the day before. As the day finished, all three indexes were near flatline. Thursday’s market opened as remarks by Vladimir Putin scorched the marketplace. He again threatened to use nuclear weapons as Ukraine missile strikes deeper into Russian territory. Stocks retreated initially, then roared ahead, with the Dow Jones Industrial soaring 500 points as tech-exiting fired up the Dow Jones.
RUMBLINGS ON THE STREET
Greg Valliere, chief U.S. Policy Strategist, at AGF Investments, Barron’s – “The markets like predictability and stability, and Trump has delivered neither in the last 24 hours,” wrote Mr. Valliere. “Is he looking for the best possible people, or does he want to send a message to his rivals? If it’s the latter, we’re in for a long four years.”
Randall W. Forsyth, Writer of “UP AND DOWN WALL STREET” for Barron’s – “The Trump rally in the stock market stumbled this past week, in no small part owing to the president-elect’s controversial appointments to the incoming administration.”
Arthur Lewis, President of Dell Technologies, Barron’s – “We are in the very bottom of the first inning for generative AI. If you think about the world’s data, the majority of it is sitting in cold tiers and archives.”
Susan Collins, Boston Fed President, WSJ – “I don’t see an argument for maintaining restrictive policy when there is no evidence of new price pressures, and the old dynamics are perhaps unevenly and gradually resolving over time.”
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