- September US non-farm payrolls +119K vs +50K expected
- US Initial jobless claims 220K vs 230K estimate
- November Philly Fed business index -1.7 vs +2.0 expected
- Canada October produce price index +1.5% vs +0.3% expected
- Eurozone November flash consumer confidence -14.2 vs -14.0 expected
- Fed’s Goolsbee: Inflation seems to have stalled
- Fed’s Hammack: Cutting rates risks prolonging high inflation
- Fed’s Cook: Not all market volatility is problematic
- Zelenskyy: Agreed to work on the US draft plan to end the war
- China’s Wang: Raised concerns on tariffs, export control and investment restrictions
- What Walmart earnings tell us about the state of the US consumer
Markets:
- S&P 500 down 1.55%
- Nasdaq Comp down 2.2%
- WTI crude oil down 17-cents to $59.14
- Gold down $5 to $4075
- US 10-year yields down 3 bps to 4.10%
- GBP leads, AUD lags
This stock market couldn’t rally on a blockbuster AI model and great Nvidia earnings.
If the bulls were to draw up a best-case scenario at the start of the week it would certainly include:
- Great earnings from Nvidia
- Gemini 3 being the blockbuster model that Google’s hype machine was hinting at
Both delivered and Google tossed in a new image model today too. It all has the AI space buzzing once again.
If addition, you toss in higher US unemployment (which leaves the door open to further rate cuts) and upbeat comments on consumer spending ahead of the holidays from Walmart.
If anything, I’m struggling to find any bearish developments and we remain in the strongest seasonal period of the year.
Yet we’ve just had a brutal day in equity markets.The Nasdaq went from +2% to -2.2% while Nvidia turned a 6% gain into a 3% loss. Both the Nasdaq and the S&P 500 touched the lowest since Sept 10.
If there’s any consolation it’s that the pain seems to be contained to equities as Treasury yields have just stepped down 4-5 bps points, gold/oil are flat and the FX market is range bound. Perhaps one spot to watch is AUD/USD as it’s inching towards the July/August lows.
That hints that the problems are more about AI and stock market valuations than the real economy. The risk is that for a big part of the economy, the stock market is the economy as it holds up high end spending.
This article was written by Adam Button at investinglive.com.