Well, US stocks are opening deep in the red and extending losses on this Friday morning.
Big tech shares slipped in the previous session, dragging the market lower.
Now weak economic debt, as well as fears that AI stocks have surged too fast, hit investor confidence.
Now all three major indexes are closed in the red yesterday as companies continue to boost spending despite a softer jobs market.
And earlier in the week, strong earnings and buying in AI stocks have lifted.
But volatility is back.
Joining me on this Friday morning is Peter Tuchman, senior floor trader at Trademoss.
Peter, good morning.
Good morning.
Good morning.
Happy Friday.
Friday.
We are seeing a lot of red though this morning.
What's going on?
So look, you know, people need to understand that we have been on a trajectory of nothing, but we've had as many as 41 record closes this year.
So the fact that the markets do go up and they do go down, and we have not seen anything more than a very shallow poll. consolidation or sell off, you know, since our February, March and April sell off, right, we saw a bit of a two fears.
We did see 2.7% sell off a couple of weeks ago around the argument between the US and China over rare earth minerals.
Well, we've seen no significant pullback at all.
So one little pullback people should not, you know, mainstream media loves to catastrophize these things and suddenly, you know, AI, which has been the flavor of the moment and the, you know, the fruit of the month type of. you know, the evaluations are a little bit frothy.
That's fine.
I mean we did see and it's worth, it's worth addressing the fact that Palantir, which is, you know, second of breed next underneath an Nvidia, which is up almost a couple hundred% this year, you know, did post incredible earnings last week or this week actually and did still sell off 8%.
So when that happens, you know, they love to like spin these stories of.
That the whole AI thing is a bubble.
Well, that's that's insanity because we know that hundreds of billions of dollars are being committed by the oracles, the metas, the Googles of the world, Nvidia, trillions of dollars, you know, in AI we're building data centers 5 years out.
I mean to think that this is any kind of a resurgence of 1995, 1998 and the bubble of the internet is insanity.
So people should just take a chill pill, if I may use that expression.
It's a financial term for some of you, and so you know a pullback of two days in a row, you know, is legitimate.
I think there are a lot of things.
Let me, let me give you the real lowdown, the down low on this.
A lot of hedge funds and institutions, hedge funds and mutual funds closed their books at the end of October, right?
Why would you not take the double digit growth you've had for the year and close out your books and not risk A potential pullback or volatility that's going to happen in November and December.
So that's a fact.
A lot of the big, big funds shut their books in October and so you're going to see a little bit of the offshoot of that.
Secondly, you're going to see some profit taking because historically September and October tend to be weaker months seasonally.
They were not.
They were strong.
So some people are feeling that there is maybe the seasonality is overflowing into November.
We've only been in November for about 7 or 8 days.
Yeah, it feels much longer.
It does.
It does.
And historically November is one of the most robust months of the year.
However, so far this November has been a little bit of a of a skittish roller coaster with a little bit more of a selfish posture.
And so whether we're going to see that seasonality pass over that we didn't experience September, October, into November, it's possible, but one day, one week of doesn't.
A market and so you know any kind of a pullback in stocks that are up hundreds of percents for the year, I would not say that we should be that concerned.
Yes, but for people who are watching and looking at red on their screens when it comes to the Dow, Nasdaq and S&P 500, and they're wondering, is this the beginning of volatility or do you expect it to continue?
It's clearly the beginning or the resurgence of volatility, and that's OK.
Right, but there's nothing wrong with volatility.
You're going to start to see, but you need to identify what is behind the volatility and not really overreact to it, right?
Sometimes volatility is rotation, right?
They're getting out of their overperformers and into some of the unperformers.
I mean these stocks that are now for sale and they've been for sale only for a couple of, you can't be up for 200 days and you're down for 2 days and suddenly it's all over and this is the beginning of the end of the world.
I don't think it is right.
I mean, look, there's still a lot of unknowns on the table, you know, the fact that we've been in a government shutdown longer than in history and the market hasn't engaged it at all, and then suddenly once you start to see the impact of these things, it's like the longer term look at of tariffs.
It took a while for the market to really to show us the impact of tariffs on the consumer.
Things that happen in the world don't automatically, you don't see the reaction.
Markets are reactionary and so sometimes you'll see a market react.
The economy and some of the manifestation of some of these things don't happen as quickly.
So a couple of days sell off or a pullback in a sector that has been up 100% for the year.
I'm not as consumed.
I know you all they all see red, right?
And look, you know what, we could be by the end of today be green, so everyone should just sit back and relax and think of this as.
An opportunity, and finally, Peter, before I let you go, we have about a minute here so I do want to ask you about Tesla's shareholder meeting yesterday.
What did you make of Elon Musk's comments yesterday?
You know what, I actually didn't even see it.
You can even illuminate me with that, but obviously we know, look, I know that they did they did co-sign his pay package, which is extraordinary.
You know, look, he's had a bit of a wild roller coaster year as well, right?
He was He was sort of the man of the moment in the Trump administration for a while.
He was running the DOG for a while.
That was amazing.
And then that became a bit of a thorn in somebody's side, and then he had his breakdown and his, you know, his day in the sandbox with the president and whatnot.
And at the end of the day we know that Tesla does suffer, you know, a lot of that visual, visual impression interpretation that everybody has about the company and about him.
And so that stock has had its day in the shade.
It's also had its harder days.
I think long term, you know, the whole space is extraordinary.
The company itself is amazing.
So what did they actually say?
Well, they announced plans moving forward and what Musk's pay package would be based on.
So he does need to hit some lofty targets, but of course the focus was on the Optimus 3.
Robots and that was interesting.
So what do you think of humanoid robots and artificial intelligence?
Well, you know what AI is an extraordinary thing, and for a while I was a bit scared of it.
I think it will benefit our lives in a big way, and that's just with the investigations I've done.
I'm actually interviewing a robot here on Monday, part of a company called Craneharrees, and so robotics are a part of our lives, you know, at one point we thought we would be like more like the Flints.
I think we're going to be more like the Jetsons.
It is not 10 years away, not 5 years away.
It's a couple of years away that robots will be a big part of our lives.
So there's autonomous vehicles or what, it's here to stay.
And so everyone should get ready for the robot.
I won't be a robot.
Remy won't be a robot, but there will be a robot sitting right next to us between us and Billy.
We'll have to see.
Well, we will have to leave it there, Peter.
Thank you so much for joining me.
Thank you.
Happy trading.
