Equity futures are rocking this morning after the very strong earnings from NVDA. The strong performance is spreading to other names in tech land as there are some potentially big moves to come with stocks AI-related. Today we’ll have GDP second look and jobless claims.
Interest Rates are slightly on the rise as bonds continue to fall. The 10 year treasury is up above 3.7%, the Fed Funds Futures are now seeing a 30% chance of a rate hike next month.
Ron DeSantis threw his hat into the ring, running for President in 2024. There is optimism over a debt ceiling raise, but US credit is now put on credit watch. Germany’s GDP came in negative, the country is in recession.
Stunning earnings beat and guidance from NVIDIA last night, driven by data center and AI computing. This company is nearly one trillion dollars in market capitalization. Other names like MRVL, MSFT, AMAT, LRCX, ASML, META and GOOGL are benefitting from the bullish surge of NVDA.
As we approach the long weekend many are watching Washington again as we all hope for an agreement to raise the debt ceiling. Volatility often recedes as we head into a long weekend.
Breadth was weak as the sell signals were confirmed yesterday. We could have a bounce here before the end of the week prior to the holiday, but make no mistake the breadth signals are bearish.
Volume picked up yesterday to the downside, clearly some stops were taken out to the downside. We mentioned early in the week that move to 20% on the VIX could be painful, and we saw it happen.
4100 was nearly tagged yesterday, the low was 4103 but that seemed to be enough to get buyers off their butts. Further, the Nasdaq, weak all day is going to rip later today.
What’s it mean?
Weak all day long as the VOLD showed down all day. But look at the put/call ratio, which soared over 1. Volatility jumped as well with the VIX closing above 20%. Ticks were concentrated in the red all day long, but we may see a reversal here to end the week.
- Thursday: GDP second estimate, jobless claims, pending home sales
- Friday: PCE for April, Durable goods, Michigan sentiment
Earnings this week:
- Thursday: BBY, BURL, DLTR, RL, COST, DECK, GPS, ULTA, MRVL, VMW
- Friday: BIG, BAH, BKE, HIBB
Hawkish. That’s all you can say. We have Richmond Fed President Barkin later today. We have another coming up this week, Susan Collins from Boston.
Stocks to Watch
NVIDIA – This stock is up strong in 2023 on hype and promise with AI. They will deliver earnings on Wednesday, we’ll see if it is a sell the news event.
Washington DC – Those dreaded debt ceiling talks continue as we march toward a hard deadline.
Volatility – In front of a holiday week, we often see volatility get smashed down by the end of the week.