Remy welcomes Michael Reinking, Senior Market Strategist at the New York Stock Exchange, to discuss the recent market movements. Michael explains that the S&P 500 has recently broken below its 50-day moving average for the first time since April, indicating a challenging environment for the markets. He emphasizes that this technical breakdown has led to increased downward momentum, making the markets susceptible to further declines. Michael identifies critical support levels to watch, including the 6700 level and the 6550 level, which are essential for market recovery.
The conversation shifts to the upcoming earnings reports from major companies, including NVIDIA and Walmart. Remy and Michael discuss the implications of these earnings on market sentiment, particularly in light of disappointing results from Home Depot, which indicated weaker-than-expected demand in Q3. Michael expresses cautious optimism regarding NVIDIA, suggesting that the lowered expectations may lead to a positive surprise, while also emphasizing the importance of price action following the earnings release.
As they look ahead to the December Federal Reserve meeting, Remy and Michael analyze the market’s current pricing, which suggests a near 50% chance of a rate cut. Michael anticipates potential dissent within the Fed, regardless of the decision made, and discusses the possibility of a “hawkish cut” that could temper expectations for future rate cuts.
Despite the recent sell-off, Remy reminds listeners that year-to-date gains remain strong at approximately 12%. Michael highlights the ongoing rotation into the healthcare sector and the challenges faced by financials, noting that the market has been moving sideways for several months. He points out that the current environment is complicated by options expiration and the upcoming holiday season, which may influence trading strategies as the year comes to a close.