Let's get to the big story breakdown.
Ahead of the market open on this Monday morning, we're looking at the major US stock averages below the flat line.
Now the market's early relief over the shutdown ending faded fast as investors worried about key economic data releases.
Well, this week we will be getting earnings out from Nvidia as well as a handful of retailers, and we'll also be getting the September jobs report.
Meanwhile, Fed Chair Jerome Powell has already warned that a December cut is not a sure thing, and several Fed officials say rates may hold steady next month.
Current market odds put a rate cut at about 50/50.
Well, joining me on this Monday morning is Peter Tuchman, senior floor trader at Trade Mosque.
Good morning, Peter.
Great to have you back.
Well, we are looking at red ahead of the open, so how are you going into this week?
You know what, look, I think.
It's really important to analyze what happened last week, right?
We know that it was sort of a little bit odd the way the market responded to the whole lead up to the government shutdown as well as the 40 something days that we were shut down.
But what was clear was that there was some relief around the fact that the government is now going to reopen.
The initial response was a 1000 point rally by the market, and then it sort of faded the next day quickly.
But you know there's there's a whole narrative around this whole story.
Once everything is sort of our whole lives post that volunteer earnings and then that 8% market sell-off has really changed the whole dynamic of everything because what it did was it gave sort of led the open the door open to mainstream media, creating a story and a narrative.
It's really questioning about the real viability of AI and about Nvidia and Palantir and the whole sector.
Is it a bubble and all that stuff, which I find bizarre because, you know, look, purely it wasn't the only thing that's kept this market up over the last couple of years.
It's not like these meta and Google and Microsoft and Oracle are not putting $600 billion into this space that's not even their sector.
We know that Nvidia is not smoke and mirrors that they're best to breed.
Palantirs had a Run up of 150% up on the year with the beautiful run up into earnings.
People need to understand that yes, it may appear to naive eyes that when you have great earnings, why would the why would it then sell off 8%?
There are a lot of other things going on that need to be looked at and so that's hopefully what you and I can eliminate them about.
There's a number of things going on.
We are in the midst of November.
November, while it's the most robust month of the year, is that we did have a September and October that we're trading at.
The fact that the Federal Federal Reserve sort of took the, took the air out of the out of their own kind of a bubble by saying that the December cut is no longer a surety.
You have to realize a lot of these people, a lot of these big funds, a lot of these people who are manipulating large amounts of money were set the stage for a they were in a lot of interest rate sensitive stocks.
Well, suddenly you take that out of the equation, they're going to have to start rotating.
So while yes, the market was taken down about 8%.
There are a number of different scenarios that could be participating in that.
These also a lot of funds closed their books at the end of October, beginning of November to lock in what profits.
Why would I ever want you to look at one of the things we teach at Wall Street Global Trading Academy is never turn a winning day into a losing day.
Why would you ever want to turn a winning year into a losing year?
S&P is up 17%.
A lot of these funds are up anywhere from 15 to 25%.
There's a lot of uncertainty around the next 6.
Weeks, so it was more likely profit taking than that it signified that this was the top of the market or it was a bubble, right?
They love to catastrophize all this stuff.
So I think people need to just hunker down and realize that and there's a look, then there are another more things that are making people fearful is that why are these big companies that are not even in this sector taking on all this debt and that's what you know and that could be one of the things that spooked.
A little bit.
And then of course Nvidia this week you know we do have Fed minutes coming out.
It will be interesting to find out how they position themselves.
Nvidia earnings are out this week.
Everyone's fear is that they're going to be great earnings, but once again it's not going to be a normal response.
It continue to go up.
They're going to sell them off again and then they're going to be able to confirm this story.
Oh, it is really smoke and mirrors, and people need to understand to look into the nooks and crannies of these situations and let us and Peter, as you mentioned, we Earnings and we also get economic data finally since the government shutdown ended, we'll be looking at those labor figures from the month of September, but also we do have to keep in mind that we've been seeing the healthcare as well as energy sector higher at least 1 week to date for 2 weeks in a row.
So do you think this is a beginning of a rotation or a more durable shift in terms of?
I think it's rotation.
You have to realize that a lot of things happen at the end of the year.
People are positioning themselves in relative to what the Federal Reserve is going to do, relative to what has outperformed for them and relative to what what what the environment is looking like, you know, that sector is look, it's almost impossible for them.
If I'm to learn anything from it, palanttier having great earnings and selling off 9% is that maybe it's not the, it's not it doesn't signify the top of the stock, but for right now you've got that maybe it's going to have some breadth.
That's what stocks do when you're building a foundation we have.
A trade that we call the trend trade.
A trend trade is when a stock is going in one direction for a long period of time and it pulls back to its moving averages, showing support.
Same thing with the market.
It's a lot healthier for a stock to go up and pull back to the levels of support to identify where the buyers live than to just go up.
I mean that is a bubble.
This is not a bubble.
So I think we're, you know, you talked about the economic data that we are not getting, right?
That is scaring people a little bit.
We had the big up 2 days, 12.5%.
That is scaring.
People as well.
I mean that's a reflection of the fear that's going on and you know the fact that we're sort of getting gaslighted by the government saying all that data that we were going to give you that you didn't have that left you driving blind for all these weeks, we decided we're not going to give it to you.
Maybe they don't have it.
Maybe the data is not as good as we think.
If that's the case, then what is really the Fed doing?
I'm not sure.
You know, also, the Fed, I kind of think we got a little bit of a poking the bear, you know, Dan Odd said to me, he goes, the chances of us not getting a cut in December are about.
As good as me playing the center me playing center for the New York Knicks and you know in season 2025, 26.
So you know what we're going to see this unfold.
So many things will happen on a moment to moment basis here. and Fridays we opened down 1000.
Thursday we were down legitimately with all this fear, down 1000.
We opened down 1000 on Friday.
We could have gone further down, but we didn't.
We had an intraday reversal.
We went from down 1000 on Friday to actually positive for the day.
For me that shows there's a bit in the market.
I felt that Friday the buyers have come back right and so I think that's an important price action to know.
Well, we'll see how all these earnings as well as economic data points play out in the markets this week, and we'll see you back here on Friday morning.
Thank you so much.
