Friends
Yes, Nvidia had great earnings. And yes, stocks rallied very nicely at the open with the Nasdaq up almost 3% in early trading. Unfortunately, those gains disappeared by midday and the market averages tumbled into negative territory (the Dow dropped over 1000 points from its early morning high). What happened? First, we got a look at the delayed September non-farm payroll number, and it wasn’t that bad. The economy added 119,000 jobs in September, which was better than expected. Why is that a problem? Well, the narrative is that the Fed is less likely to lower rates at the December FOMC meeting. Apparently, the Fed is more important than Nvidia. Kidding aside, the data is very likely to keep the Fed on hold for now and the bulls really want lower interest rates. Another problem is the bloodletting in crypto. Bitcoin has now fallen more than 30% from highs posted just about a month ago. That’s a lot of wealth disappearing in quick fashion and certainly can affect spending by crypto kings who felt a lot wealthier just 30 days ago.
As for stocks, by the close the Dow Jones Industrial Average was down 386 points to finish the day at 45,752. The S&P 500 was down 103 points to close at 6,538. The Nasdaq Composite Index was down 486 points to close at 22,078. Gold was down $7 to trade at $4,076 per ounce, while oil was down $.17 to trade at $59.27 per barrel WTI.
Have we begun a correction for stocks? Remember back in April of this year we had a pullback of nearly 19%, so it would be somewhat unusual to have two sizable corrections in the same calendar year but there are certainly no rules against it. In addition to Nvidia we have been getting earnings releases from major retailers. So far both Walmart and TJX had great results while Target still is struggling. With the volatility and downward tilt of the market averages, the retail earnings have been somewhat in the background, but it’s still a sign that the winners in retail continue to win while those who have struggled continue to do so. Anyway, that’s enough for now. Let’s see how the week finishes out tomorrow.
Have a nice evening everyone.
