Expectations of a 0.5 point rate continue to advance.
Now the S&P 500 has fully bounced back from the sell-off that followed Nvidia's earnings.
And here today all sectors of the S&P 500 are in positive territory, with services, IT, and utilities outpacing the index itself.
Well, Thanksgiving Week optimism is kicking in with healthcare, one of the top performance for November, as well as a 3 month basis.
Joining me ahead of the Thanksgiving Day holiday to weigh in is Larry.
Torelli, who's chief technical strategist at the Blue Chip Daily trend report.
Good morning, Larry.
Thank you so much for joining us.
So first, I do want to start out by looking at the S&P 500 in New York morning trade.
We are looking at the index higher, up by about 0.5 of a percentage point.
But when we look at the index, it is now trading above the 50, 100, 200 day moving averages.
So how much of this week's advance is a sign of broad market momentum, and do you think it's sustainable?
Good morning, Remy.
I do think it is.
So we saw a very sharp reversal on Friday, or started on Friday.
So Friday, 88% of the stocks in the S&P 500 were higher.
Yesterday, 84% of the stocks in the S&P 500 were higher and as you said, we're back over the 20 and the 50 day moving average.
We also put in a higher high versus that Thursday gap opening that we had with Nvidia and something else that I shared with your team is last Thursday.
The Nasdaq 100 oscillator hit the most oversold level of 2025.
That often leads to a sharp reversal.
That's what we've seen, and I would say based on the price action in the S&P, I think there's probably a 75% to 80% chance that the lows are in for this pullback.
And Larry, while I have you here, I do want to zoom in on Google's parent company Alphabet.
So with all that surging on AI momentum and Nvidia sliding on fears of new competition, is this a real shift in the AI trade, or do you think this is a temporary shakeout between two of those tech giants?
I believe that you you need to own both.
I think that what Alphabet's doing with their their TPUs is going to cut into a part of Nvidia's business, but you, you really need to own both.
They're the leaders.
One interesting thing about.
Alphabet is while most of the NASDAQ 100 corrected stocks like Nvidia and Palantirer pulled back sharply, Alphabet broke out to new all-time highs.
I think that is a real move and they need to be taken as a serious leader in AI.
Yeah, and Lara, Larry, building on this, when it comes to Google and meta, they are in talks over TPUs and Nvidia facing a potential crack in its AI chip dominance.
So do you think this is a start of a real shift in the AI hardware race, or do you think this is some high stakes game of posturing that we're seeing?
I think it's an adjustment.
I think what Alphabet does is they let some of the buyers, some of these hyper scales, maybe have a little more negotiation power with Nvidia, but at the end of the day, I think that Nvidia is still a core leader, and it's a stock that needs to be owned.
And Larry, ahead of the Thanksgiving Day holiday, expectation of a Fed rate cut in December continue to climb.
And right now looking at the probability of a 25 basis point cut above 82%, nearly 83%, but White House economic chief Kevin Hassett is now seen as the leading candidate to replace Powell, according to reports, and after This week's delayed data we are looking at the expectation of that quarter point cut higher.
But with investors backing off expectations for aggressive rate cuts, but the White House pushing for a quick easing, do you think the Fed will be walking the line between political pressure and economic reality in the new year?
I do.
The Fed is in a bit of a difficult position right now because most of the data that they're working with is delayed and there's going to be a key report after their upcoming December 10th meeting.
So the Fed is in a bit of a predicament.
I do think that they're going to cut in December as the futures market is priced in, and I think that's it obviously for 2025.
We'll have to see how the new data comes in.
And Larry, finally, before I let you go, this is the time of year that we're getting some bullish calls on Wall Street for targets for the S&P 500, but what are other calls that we should be paying attention to?
Yeah, I think we need to pay attention to sectors.
The healthcare sector has been very strong, and we saw a big rotation into health care when the government shutdown officially started.
If you look on the charts of the healthcare stocks, there was a major rotation into stocks like Eli Lilly, HCA, also the biotech stocks that Mary Anne mentioned.
I'm very bullish on that group.
What's interesting to see is even with the S&P 500.
And NASDAQ 100 bouncing over the past few days.
Healthcare led again yesterday, so we didn't see any selloff in healthcare.
Stocks like Eli Lilly just broke out from an 18 month price base.
HCA is breaking out to new all-time highs.
The biotech ETF XBI is very strong, so I would continue to focus on health care and charts that are breaking out, not just yesterday's leaders.
OK, Larry, well, great having you on the show.
Thank you so much for joining us today and have a happy Thanksgiving holiday.
Thank you, Remy.
You too.
Thank you very much.
