Let's get to the big story breakdown.
Wall Street set for a higher open after the S&P 500 and Nasdaq both recorded their worst day since April.
This did come as Trump threatened to higher tariffs on China.
Now we know the S&P 500 just celebrated its third anniversary of its current bull market run yesterday.
Meanwhile, a strong 3rd quarter earnings season will be crucial to keep equities moving higher.
Joining me on this Monday morning is Peter Tuchman.
Your floor trader at Trade Mosque.
Good morning, Peter.
Good morning.
So much happening. never disappointing.
Yes, and so much for that nor Easter that was supposed to slam into the Northeast.
So here we are.
And if we were away on Friday, we're looking at the Dow and Nasdaq pointing to a higher open, up by nearly 400 points ahead of the open.
But first and foremost, what did you make of that sell off on Friday and what does it mean going forward?
So you know, look, if Go back to the first time in Trump 1.0 when he mentioned China and tariffs.
That has always been sort of a hook or a claw in everybody.
Whenever you put those two words together, it causes fragility amongst the market.
Obviously our largest trading partner, but the most contentious relationship that we have in the trading space.
And so you know, two very powerful leaders, two very powerful egos, and two very powerful economies.
With so much depth and networking inside of them.
So if you go back to actually Trump 1.0, when on the day that Trump for the first time was in Davos at the economic conference, and he mentioned China and tariffs, the market sold off 1400 points right at 11 o'clock on a Tuesday.
I have a strange photographic memory and by the end of the day we had rebounded 2800 points and actually closed up 1400.
We went from by definition. a bear market to a bull market over lunchtime.
That was an unheard of thing, and we've seen that over time whenever the tariff story bring also brings in the China story, we have that.
This was all about rare rare earth minerals, you know.
I think the the fight was sort of picked by the president of China initially, you know, and look, you don't, you don't, these two or two people you don't pick fights with and so I think they both sort of grabbed their their their balls and left the playground.
And they were angry and the markets, you know, responded favorably.
Look, we know that the market was ripe for a bit of a sell off.
All it needed was a catalyst.
We've spoken now, you and me, week after week.
What is this?
What is the next shoe to drop or what is the next catalyst that's going to make the market higher?
We did not know what it was.
We were asking ourselves what could get tossed, thrown at the market that would cause a a selloff and we couldn't come up with an answer.
Well, that was the answer.
It was China and tariffs once again across, you know, commodities which is one of our biggest. trading venues, I guess.
And so you know the selloff was aggressive.
It was large, you know, the question is, when you close on a Friday afternoon coming into a weekend down at the low of the day we were we closed down 180 handles on the S&P.
We sold off another 60.
By the time I left the exchange at 440, we were down 250 handles, so it continued to sell off.
Normally when that happens, you usually see a gap down on the following Monday and the market continues to sell off.
However, the narrative got temped down a lot over the weekend.
I think people's eyes were on the on the release of the hostages, and it was not normally on these situations.
You have a whole weekend of all this catastrophism in the media talking about how bad it is and all this terrible stuff that was not the case this time.
They tampered down the story and people sort of came in.
We were already trading up by Saturday afternoon and the market, you know, was, was able to rebound quite aggressively and we're seeing that fall through this morning.
Yeah, and Peter, as you highlighted a lot.
Focus on what's happening in the Middle East and we're going to watch developments coming out from Egypt as the peace summit kicks off.
But of course this week it's all about earnings here on Wall Street.
We're going to hear from the big banks tomorrow as well as Wednesday, the rest of the week.
And it was really interesting because coming in this morning, JPMorgan announced its investment of $1.5 trillion in national security sectors.
So that will be interesting to hear more details coming up from JPMorgan.
But in terms of earnings, what are you watching?
So look, I mean the banks are the first ones usually out of the gate and obviously they are the ones that reflect the health of the consumer, the health of the banks.
That's the most important thing of all.
They're always the first ones to release.
And look, if they show that they're strong, that will mean they will give us a little bit of the temperature of the impact of tariffs on the markets, right?
We know we're sort of getting near a point where we should really be able to get a handle on what effect the tariffs are having on individual corporations, on the banks, on the.
Consumer on the consumer sentiment right coming into obviously the holiday season.
So that will be very telling to us if they come in weak and they come in with guidance that looks weak because they're basically they're just telling the truth.
Basically things are more problematic than they thought based on these tariffs.
Well then that will be a problem and it will really set the temperature for the future if they show that there's still strength there, consumer sentiment is strong and the guidance they give is solid, well, that will set the stage for a much higher move in the market.
And we have less than 60 seconds here, but as we kick off the week, we're seeing gold clear, new record highs, topping 4100.
But at the same time, while Bitcoin is trying to recover some of the losses, it is still down when we compare the price on Friday morning.
So what's going on here?
What are the look, we were seeing that that there was no sort of you know, normally with gold in the markets there's a little bit of an interest relationship when markets sell off, people buy.
They've been buying gold throughout this whole rally.
People are looking for a very quick return on investment, and they're getting it from gold.
They're also getting it from crypto.
I'm not really sure.
I haven't done a lot of investigating into what happened, whether that was a major margin call because of the markets being down or somewhat of a glitch.
I don't know the particulars around that sell off, but that was a $20 billion.
I mean, I don't know I don't know the particulars, but it sounded major.
And when you have that, when you have a margin call.
You have a glitch in the markets, especially in crypto, where there's not a lot of transparency that really can send us a spook through the, you know, through the whole marketplace.
So look, my gut is we will, especially with the market opening a higher, I think we're going to rebound across the board.
There's been a lot of enthusiasm recently.
We had 125 on the Bitcoin, and that was a new record high.
We're seeing 4100, which is spectacular on gold.
Basically people are putting money to work, you know, coming into the end of the year they are watching where else are you going to put your money.
The return on investment across the board in crypto, in gold, and in equities and futures has been so wonderful for anybody that you know people are thrilled and they should be having a good year.
I know through all the rebounds we're up 11% on the S&P.
We were down 21% at the low.
We rebounded that and we've come higher, so.
I think things so then this week will be very telling.
Yeah, and Peter, you and I will be back together on Friday morning, so we'll keep an eye on politics, earnings as well as geopolitics.
Thank you so much, Peter.
I wish you all the best.
Happy training.
