On this episode market strategist, Eric Chriscuolo breaks down the latest action on Wall Street as equities hover near record highs, with technology and consumer discretionary sectors leading a steady rotation rather than signalling a defensive, risk-off environment. He explains that recent volatility was driven by sweeping fears that artificial intelligence could disrupt entire industries, sending shockwaves beyond software into sectors like real estate and financial data, impacting companies such as Moody’s and CBRE before signs of stabilization and selective rebounds emerged. On the technical side, he notes the S&P 500 remains range-bound below the key 7000 resistance level, with traders closely watching moving averages and options-expiration volatility for clues about the next breakout. The discussion also highlights a growing global trend: international markets are currently outperforming U.S. equities, with standout strength in countries like South Korea and regions such as Europe, Japan, and Southeast Asia as investors rotate into overseas opportunities after years of strong U.S. performance.
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Markets Near Record Highs? Eric Riscolo Breaks Down AI Volatility, Global Outperformance & What’s Next at the New York Stock Exchange
Thanks for being here.
Always a pleasure to be here.
You're rocking the green tie for all the green up on the big board.
I always like to say with the opening guests, it doesn't feel like we're so close to all-time highs, but today pretty normal rotation.
Tech is leading.
Discretionary is leading.
It's not one of these kind of wonky risk off defensive days.
What do you see in the markets today, Eric?
I think you nailed it right there.
I mean, you know, we've gone through the apocalypse a couple of weeks ago, and then that just kind of swept into.
Other areas of the market that weren't even, you know, software focused real estate companies that sold data, financial data companies, they all kind of came on this wrecking ball of AI is going to wipe out and destroy everything, and that's kind of slowed down a little bit.
You know, software was still under pressure for most of last week, a little bit the beginning of this week, a little bit of a rally in some of the software names today, some of the other names that got hit like Moody's.
They had a nice bounce today.
They were one of the names that got hit prior last week on on those AIP.
So Moody's popped a little bit.
So you're just kind of seeing maybe a little bit of of a pause in that, you know, creative destruction narrative that's been going on, allowing some of the other names to kind of catch up, fears to calm down a little bit, analysts to really dig in and kind of figure out is this, is this something that's going to, you know, destroy these companies.
Or is it just a speed bump, you know, where are we exactly in?
Yes, CBRE in terms of commercial real estate, one of those other companies will be doing a deep dive on CBRE's bounce back, but that's a great example of a sector in the stock got throttled last week as we had these AI fears swipe their way through like sector by sector.
It wasn't just like deep seak knee jerk reaction.
This thing has kind of had some teeth to it.
It was a wave, and we don't exactly know if we're through the wave yet or if we're back down.
The shallow waters.
Only time will tell.
What do you see on the broader technicals for the S&P 500?
We're at 68, 81, 31 here for the close.
We still have not yet closed above the psychological level of 7000.
We're all waiting to bust out those hats.
What do you see on the technicals?
Yes, we've been trading 670, 50 to 7000 for a little while now.
We're kind of stuck in this range.
We tagged the 50 day moving average a couple of times.
We just did it today or yesterday, and then we kind of bounced.
Right up to the 100 day moving average or vice versa.
So we tagged 100 day, that's up to the 50 day.
So we're kind of playing between these two levels.
7000 definitely an area of resistance.
We haven't been able to really break above that at all.
That is definitely something where investors want to see you get above that.
We love round numbers.
We love big round numbers.
7000 is a perfect level.
So that's something where if we can get momentum after this week, maybe.
The expiration happened today as well, so some of the volatility, the trading around that volatility is going to get sucked out.
That could maybe free up the markets to move higher.
We'll see that.
Do we have options expiration Friday?
It's the 3rd Friday of the month.
We also expect that oftentimes we see some volatility, a lot of uncertainty, specifically into the closing auction.
Before I let you go, what are you seeing right now with regards to US equities here in the United States versus global performance?
There seems to be a lot.
More conversation and hype and enthusiasm about what's going on in other parts of the world as well.
Just like last year, international markets are beating US markets, specifically the S&P 500.
It happened last year.
It's happening again this year.
You look at a country like South Korea, just has been on an absolute tear, mainly because of the really big mic the storage companies, the memory companies that are all kind of based there, or most of them based there.
They're just seeing an absolute. climb up in their index prices, but European companies as well, they've been ripping the European banks have been doing really well after just a long period of underperformance.
So you're just kind of seeing this 1 to 2 year catch up trade right now with the European equities, Japanese equities kind of Southeast Asia equities, they're all kind of just kind of moving up past the US We've been up 80, 78% over the past 3 years, so it's not a giant surprise that the US is kind of slowing down a little bit.
We'll see what happens later on in the year if it continues, but that is definitely a trend that's been happening in the first part of this year.
I'd like to say the trend is your friend, so we'll see if it continues.
Eric Chriscuolo, market strategist here at the Big Board, thanks for kicking us off as always.
Good to have you pleasure.