Let's get to the big story breakdown.
While Wall Street is in the red after a sharp sell-off on Thursday, tech came under pressure for yet another trading session.
Now the US government shutdown finally came to an end after 43 days on Wednesday evening, but uncertainty over the outlook of the Federal Reserve remains as economic data on.
Labor market inflation has yet to be released.
Now a White House official saying the October unemployment rate is unlikely to be published, though some labor data is still expected to come out soon.
Joining me on this Friday morning is Peter Tuchman, senior floor trader at.
So Peter, good morning.
We are seeing a lot of red.
What's happening?
You know what?
Look, I've really been trying to figure it out, right, because look, we had the government shutdown.
The market did not react normally to the anticipation of it all the time through it.
And clearly not now, you know, the initial reaction was positive, right?
We were up about 105 handles that day that they announced that we were going to end the shutdown.
But what I think we're seeing is, and I kind of I spent a lot of time on the phone this morning with Dan Ives just to find out because it's a tech sell off.
It's very specific.
Right.
And so we saw that Pallanttier came out with earnings, right?
Tech has killed it on earnings across the board this quarter, right?
Yet when we just saw Pallanttier's earnings, which were blowout earnings, the stock went down 9% and took the market with it.
Why, why would that happen?
Right?
So it turns out that there's a lot of reasons, but it's curious how the market, you know, there can be a sector that keeps the market up and took the market up for the last 200 days, and then the minute there's any kind of a wavering, you know, they're throwing the baby out with the bathwater.
So what's ending up happening is this.
One of the one of the things is that people feel that a lot of these large companies like Oracle, Microsoft, Google, you know, there's been this big push towards the data centers, right?
That is data centers is where they make the GPUs.
That's what's going to be necessary to keep this ball rolling in the AI space.
All these companies are taking on a lot of debt, right, which they wouldn't have had before, and it's debt in a sector that they're not used to.
And so you know people are trying to identify why.
Way to palantir after blowout earnings sell off, it ran up into earnings, right?
And so you know these stocks have been, they're trading at really super proppy valuations and so there is always this old adage on Wall Street buy the rumor sell the news, right?
So you know there's nothing, there's no way for even if they hit on every piston, which they did, right, for it to go higher after those blowout earnings, it doesn't make sense.
So if people are in the stock.
Then you know, also we're in the middle of November.
People are fearful about what the Fed is going to do, right?
We dropped down to a 50%, 50% chance that we're going to have a cut.
We're not getting the, you know, this is I'm sort of throwing at you all the reasons why the market is selling off, right?
So there's a lot of fear that we're not going to get a cut, which doesn't make sense.
We're supposed to get all this information which now either the government's gaslighting us and ghosting us on this thing or what we don't know, and then.
So that's it.
And so what you're ending up happening is that people are realizing we've got so much profits intactch this year.
It's the middle of November.
There's so much uncertainty coming into these last 6 weeks.
Why wouldn't I lock in the profits I have and let me get out and and I'll look again.
Yeah, and it's interesting you mention all those points because despite the government shutdown ending and the government reopening, there are questions about what was actually resolved and whether we're just kicking the can down the road.
And given all the volatility, we're looking at the VIX up by 12% this morning.
We're also looking at, yeah, and we're looking at quite a bloodbath when it comes to crypto.
So where are Your concerns.
Well, look, my concerns are, look, I, I don't have that many concerns because for me, I really believe this is just a buying opportunity.
My gut is that we're going to have a little bit of a capitulation here as look, you have to realize a lot of these funds, a lot of these institutions close out their books at the end of October, right, to lock in whatever profits.
Everybody's had a great year.
The S&P is up 17%.
Short of these last couple of days and so and a lot of those profits are way grander in the tech sector.
So you know I think that people are just, there's fear in the market, no question about it.
There's a lot of economic uncertainty and more uncertainty because we don't know the numbers and so it's almost like a perfect storm in a way that we're suddenly just get thrust in.
You and I have been talking, you know, every Monday and every Friday about how the Market was really robust for a while.
We had great earnings that it was sort of flatlining and then it wasn't reacting negatively to the shutdown and that was curious and then there was seasonality for September and October, but it didn't sell off.
Maybe some of that's going to carry over into November and then boom, suddenly this whole thing happens and they're suddenly, you know, they're suddenly talking about that AI is a bubble and that, you know, and everybody's just like, I think everyone feels like we've had a great year.
Why not lock in the profits we have even in grow a crypto, you know, crypto.
It's fascinating, but I can't explain it when it goes up.
I can't explain it when it goes down, so I'm not going to go there.
But also you're seeing that, you know, it feels like people are just going to get into cash.
They're trying to hold on to the profits for the year and then they're going to look again and I think this is for me, I think this is an opportunity to buy.
OK, Peter, well, we will have to leave it there, but we'll see where the market closes on this Friday and we'll also be back on Monday.
So have a great weekend.
