Let's get to the big story breakdown.
Well, US stock futures are turning higher this morning, and this does come on the heels of New York Fed's Williams calling for a rate cut.
Right now we are looking at the probability of a December Fed rate cut standing above 70%.
Yesterday, the major stock averages lost momentum after a rally fueled by strong Nvidia earnings, as well as jobs data.
The delayed September jobs report.
That the US added 119,000 jobs, more than double expectations, though the unemployment rate ticked higher to 4.4%.
Meanwhile, on video reporting a record $57 billion in quarterly sales, while Walmart shares we saw Walmart raise its financial outlook.
Joining me on this Friday morning is Peter Tuchman, senior floor trader at Trademos.
So Peter, happy Friday.
Good morning.
Happy Friday.
It's happier Friday.
Right.
And yesterday we saw the markets rally straight out of the gate, but pretty soon before the market closed, we saw the stock averages stumble.
So what do you think we're going to get as we head into December?
Well, look, I mean, now we're starting to understand all these movements on the upside and the downside are starting to make sense right for a while and they're multicomponentable if that's a word.
OK, so we know that.
Look, everyone's fear was that we had new Pallanttier had earnings that came out.
They were stellar and the stock went down 8%.
Everyone's fear, then they started this narrative about that AI is a bubble, which is insanity.
OK.
People need to understand to buy rumors sell the news.
Old adage on Wall Street is Pallantir for 7 days into the earnings was up every single day.
When you have that kind of price action, it's going to sell off.
People are going to take profits when the earnings are announced.
That's classic.
Nvidia, however, sold off for 3 weeks into the earnings, and they came out with earnings and they went up.
So it did not do what everybody thought, and that was a big fear.
The whole thing about AI being a bubble is insanity because you've got Microsoft, Google, Meta, Oracle putting 600 billion each into this plus Nvidia, putting $12 trillion into it.
So that whoever is saying that is just the most that's like this catastrophe nonsense.
All that being said.
Yesterday's was a massive reversal.
The reversal happened.
Earnings came out.
Everything was fine.
We were up big.
They came out the night before.
It followed through to yesterday morning until the Fed announced that they were not going to have, we're not going to cut in December, and that completely knocked the market off its beam completely.
And so we just, and plus the fact is that we're not getting any of this economic data.
So you've got just once again it's like as if you're driving down the road going 70 and Someone puts on a pair of dark glasses on you, you're just suddenly just blindsided.
OK, so today, obviously now with the Fed coming out with this thing, now there's no guarantee on that.
It's just one of the governors saying that we should do it because they see the implications of not doing it.
And so that's why we're up 34 handles.
Look, today is a Friday.
Anything could happen today.
Yesterday, going from, it was literally we were up 1000 points and then we went down 1000 points.
That's that's a massive reversal.
I think things are going to settle down with this Fed thing because it's all around, it's all about the Fed, right?
And so we'll see, you know, the next couple, next week is a short week of the holiday.
You know what, at this point, anything can happen.
It's a matter of what story they're going to focus on.
If it's the Fed thing, then they're going to it's going to pull back.
If it's not, then we're going to go higher.
Yes, so Peter, speaking of which, we've seen volatility not just across the equity markets but also crypto.
So this morning we saw Bitcoin fall below 81,000.
That is significant given the pullback we've seen just this week.
So what's actually moving. the broader markets, you know, I've done a big deep dive into it.
Crypto is not my thing, but it's affecting the stock market, so I really needed to understand what was happening, apparently back in April.
So apparently crypto brokerage firms offer as much as 100 to 1 leverage.
OK.
And then back in April, everybody there was a whole another tranche of people trying to get into the Bitcoin market and then they were buying it on a heavy leverage and the price that they Got in was in the 80s.
OK, 88, 89, 90.
OK, so there's apparently there's a couple of large trades that been going on, sort of bets about crypto going down.
That puts some pressure on it, the market falling off, that put a little pressure on it.
And then this massive margin call once it broke below these levels where everybody had to get into cash quickly.
So where if I need cash quickly, where am I going to go?
I'm going to go to my Nvidia and my alunteer positions because they've been the ones that have made me a lot of money this year and I want to, I'll take profits where I can.
I need cash quick to cover my margin call or otherwise I'm going to lose whatever position I have in me and apparently the price is around 86 and Bitcoin is where that big margin call happened.
And so that's why once it got below there, you saw that capitulation down to 81.
Now it's trading a little bit back higher.
And finally, as we head into next week, it is a holiday shortened week as you mentioned, because we have Thanksgiving falling on Thursday and it's going to be a short session on Wednesday as well.
So what are you looking to as we head into the weekend?
Well, on Monday we have the MSCI, that is the largest global index rebalance.
OK, so you're going to start to see a lot of rotation, right?
There's going to be big volumes, people get.
In and out of positions, you know, we've always talked about it.
Seasonality isn't even a thing anymore, to take that out of the Wall Street Dictionary because you know September and October are supposed to be weak.
They were record highs.
November is supposed to be robust.
It was, it was beaten up.
So you know what, I'm not worried about that part of it.
I think we're just going to have to see where our focus is.
It's a matter of all.
All around what the Fed does and look, my hope is that we go to Dow 50,000, S&P 7000.
Now if we get this cut, there's a chance there, you know, this is literally a minute to minute market, right?
Yesterday when the video earnings came out, it looked like we were all roads are leading to heaven.
And then obviously with the Fed doing that, it knocked it burst that.
I don't want to say bubble.
It burst that marketplace.
Well, Peter, you and I will keep a close eye on those key levels as we head into Friday, as well as the weekend.
You and I will be back bright and early on Monday.
So thank you so much.
Thank you.
Have a great weekend.
Happy trade.
