Let's get to the big story breakdown.
While Wall Street on another roller coaster ride this week from earnings to trade tensions to new credit fraud fears, regional banks got hit as investors worries deepened, and we are heading into the final session of a volatile week on a mixed note.
Joining me to weigh in is Peter Tuchman, senior floor trader at Trademoss.
Happy Friday, Peter.
What a week.
This morning we are looking at futures mix.
The Dow trying to go higher after all that.
Volatility this week and that sell off last Friday.
So where are we right now?
OK, so you know what ended up how you sort of mentioned it.
It's literally there are three pieces of this puzzle.
Obviously trade talks are one part.
It's the narrative between President Xi and the United States, you know, whether it's soybeans or cooking oil, whether it's rare earth minerals or whether we're just, you know, you know, we're just having a contentious play of egos, and then obviously we've got the regional banks, right?
In the past when we look at Silicon Valley, it harps back to the Silicon Valley. which was a while ago. people are fearful of credit and leverage and and and people are, what that shows is what that should show us is that the impact of tariffs is starting to show its weight on people's ability to pay their bills.
People are delinquent on credit and stuff like that.
And so you're starting to see a little bit of a fragility in the regional banks.
Jeffrey's struggling, some other stuff going on there.
So you kind of broke it down and then earnings, right?
So there are 3 pieces of the puzzle.
It's a matter of whose voice is going to be louder today, right?
In the middle of the night we did see them.
So yesterday we were down on a lot of that, a couple of tweets here and there, as we always know, we're one tweet away from Crazy Town.
And so and now we saw that this week a number of times where the market was sort of stabilizing, you know, and then a tweet would come out and we would sell off 50 handles and then it would bounce back.
And so I beg everyone just to be, be, you know, if you're a trader just to protect your downside risk because we're going to start to see this kind of volatility and I know from some traders we had spoken to, you know, I'd rather lose $400.
On a trade than to 20,000.
So protect yourself.
The volatility is back for a while there you and I talked like what is it going to be that suddenly gets this market gets shaken up again.
We were trading flat line off the top and not that we didn't we aren't sort of forever bulls, but we wanted to know what would be the next shoe to drop or the next catalyst on the upside.
Now we know what it is.
When you mention China and tariffs together with the United States or any kind of aggressive narrative, you're going to see the market react to it and that happened last Friday.
And it's really been sort of curating the way the trading has been all week, yeah, and absolutely, because if we look at the VIX this week right now we are down about 6%, but it's still hovering right around the 24 level.
So it does speak to the volatility we're seeing across markets.
It's not just equities, but it's crypto as well as commodities and currencies as well.
But we can't forget the bank earnings, especially as earnings season is officially underway.
So what do you make of what we saw in the bigger banks? bigger banks are.
And there was reasonable guidance, but I think sometimes the underlying regional banks are more significant because we know you know that the bigger banks have a much bigger exposure and they they they could be a little bit padded from some of what's going on in Middle America, right?
So regional banks maybe tell us a little bit of more of the temperature of what's going on as far as that concerned, but you talked about it.
The VIX, you know, and the VIX is a funny index, right?
And so VIX has been sort of flatlining for a little while with a little bit of an upward trend showing that. and that fear in the market yesterday the VIX was up 15% and the market was only down 40 handles.
So you're starting to see people buy protection.
What does that mean?
The fear the VIX is the fear index.
So when people are along the market and they start, they're fearful that the market is starting to break down, people will buy the VIX to offset their positions there.
But look, bank earnings are a big deal. guidance is a big deal.
The narrative between US and China is a big deal.
What's going on around regional banks is a big deal.
I did an interview with Andrew Ross Sirkin.
Earlier this week and he just wrote a book about about 1929 and the crash of 1929.
You've got to read it.
Extraordinary.
I did not know anything about everything that led up to I wasn't around for that crash.
I've been around for every crash since then, but it was fascinating.
That was all about stocks and about leverage and about margin.
They basically for everybody could go around and Give a dollar to these all these little shops that opened up and they would give them $10 as long as they put it into the stock market and so it set the stage for this giant bubble which ended up being the crash of 29.
I'm not I'm not predicting any rash here, but we need to be aware that, you know, sometimes the market and the economy don't necessarily trade in concert.
The market is being fueled by a lot of AI and tech that's been.
Solid bank earnings and whatnot, but underneath all that is is some, you know, there's a little bit of a marination going on which is showing that we are being affected by tariffs.
It is affecting the general consumer and consumer sentiment, so we have to be aware of that.
Well, we'll see where markets open and close today.
We'll be back bright and early, Peter, on Monday morning.
So have a great weekend.
Thank you everybody.
