...given the state of the market overnight, decided to return to make limited posts on this thread
* Market turbulence was always going to return when we least expect it
* Stronger economic data from US led investors fearing that the Fed pivot won't come soon enough, Goldman cautioning prospect that there may not be a cut this year
* At the close, Dow had the largest single day fall this year of -605pts to 39,065, S&P500 -0.74% and Nasdaq -0.39%
* Ironically, the sharp pullback came on the day NVIDIA soared +9.32% on sterling set of results ; the heatmap has been ugly, with NVIDIA standing as the odd one out https://x.com/unusual_whales/status/1793733513109499983
* Tesla -3.54%, AMD -3.08%, SMCI -2.96%, AAPL -2.11%, MSFT -0.82%, Amazon -1.14%, and Boeing plunged -7.55% knocking 100pts off the Dow
* AUD tumbled and stayed above 66c at 66.05c and DXY returned above 105 at 105.05 , US yields rose, 2yr at 4.94pc 10yr at 4.48pc but only mildly
* Gold was already pulling back and currently standing at its support at $2330, GDX and GDXJ both lower by -1.97%; and like Gold, Silver also sitting at its resistance turned support of $30
* Banks were lower, XLF -1.38%
* WTI Crude at $76.76 falling off from closer to $80 levels a few days ago, oil stocks broadly lower with XLE -0.91%
* Lithium stocks with exception of SQM experienced sharp pullback: LIT -2.14%, ALB -2.78%, SQM +2.34%, LAC -6.17%, PLL -5.15%, ALTM (Arcadium) -3.19%, Patriot Battery -2.82% [ you can follow my coverage of EV/Lithium of the same name under a separate thread here]
* and the sharpest pullback for Copper https://x.com/TaviCosta/status/1793726127854530915
BY Zero Hedge
FRIDAY, MAY 24, 2024 - 06:00 AM
NVDA smashed earnings and guidance out of the park and shares exploded over 10% higher...
... to make the AI-darling above $2.5 trillion market cap for the first time...
Source: Bloomberg
With around a 1% decline in US stocks, total US market cap fell by around $500 billion, while NVDA alone added $230 billion... Source: Bloomberg For everyone else there was more great news about the American economy... US PMIs surged to two year highs proving Bidenomics is awesome (though input prices surged), and jobless claims remain near record lows. New home sales were weak but the market chose to ignore that.
BUT... just as the dismal dump in soft data recently has prompted buying panics across stocks and commodities (on Fed cut hopes)... so the 'good news' today sparked a very bad no good response from markets with rate-cut expectations tumbling further. The market is now pricing in just chance of two rate cuts this year and has reduced 2025's expectations to three more cuts only... Source: Bloomberg And so while NVDA was charging to ever more impressive highs, everything else shit the bed with stocks down hard, oil & gold tanking, crypto clubbed like a baby seal, bonds battered, and only the USDollar managed gains, recovering from overnight weakness.
Small Caps and The Dow were the biggest losers on the day with the latter hit by Boeing's breakdown. Despite NVDA's surge, Nasdaq and S&P were down significantly too...
Small Caps fell back to (and found support at) the 50-DMA today (all the other majors are extended well above their 50DMAs)... Boeing shaved almost 100pts off The Dow today but all 30 components were red...
'Most Shorted' stocks continue to trend lower as short-squeezes have run out of ammo... Source: Bloomberg
Magnificent 7 stocks ripped higher out of the gate (thanks to NVDA) but by the close had given it all back... Source: Bloomberg
Treasury yields were up across the board with the short-end a slight laggard (2Y +6bps, 30Y +4bps)... Source: Bloomberg
The dollar rebounded off overnight lows to end higher... Source: Bloomberg
But gold was slammed lower once again... Source: Bloomberg
Bitcoin hit $70,000 and was immediately dumped... Source: Bloomberg But, Ethereum held on to gains as hopes for approval of the ETH ETFs rises... Source: Bloomberg
With ETH/BTC soaring... Source: Bloomberg Oil prices flip-flopped to end at three-month lows... Source: Bloomberg
Finally, to clarify, the market is in 'Upside-Down World' still where good (macro) news is bad (market) news and vice versa... Source: Bloomberg
But don't forget that inflation indicators just keep surprising to the upside (and now growth is getting a pump)... Source: Bloomberg
Hardly an obvious scenario for rate-cutting... but then again, it is an election year and Biden is down bigly... Source: Bloomberg
...so anything goes for the apolitical Fed.
ASX to slide as Wall St sinks on rate setback
Timothy Moore
Australian shares are poised to fall after China sent a mix of military aircraft and warships to "punish" Taiwan days after Taiwan's pro-independence president, Lai Ching-te took office.
Separately, sentiment reversed in New York as investors viewed the latest US economic data as further confirmation for Fed policymakers to hold rates for longer. May flash manufacturing and services PMIs came in better than expected.
Australian shares are poised to fall sharply to start Friday’s session, reflecting weakness across commodities and after Wall Street’s sell-off.
ASX futures were down 83 points or 1.06 per cent to 7759 near 7am AEST. Oil flirted with falling below $US81 a barrel. Gold slid below $US2350 an ounce. Iron ore retreated below $US119 a tonne.
“Iron ore futures edged lower as traders took stock of last week’s announced support measures for the property sector [in China],” said ANZ Bank. “They are likely to remain a welcome boost to sentiment. However, their impact on demand for iron ore and steel may be lacklustre.”
All three US benchmarks closed lower as investors viewed the latest purchasing manager data as reason for Federal Reserve policymakers to hold rates higher for longer. Both the May flash manufacturing and services PMIs came in better than expected.
The S&P 500 finished down 0.7 per cent; the Nasdaq Composite slid 0.4 per cent and the Dow lost 1.5 per cent.
Nvidia rose 9.3 per cent, lifting its market cap to $US2.55 trillion. Apple slid 2.1 per cent, taking its market cap to $US2.87 trillion.
US business activity growth accelerated to its fastest for just over two years in May, according to provisional PMI survey data from S&P Global.
“US yields rose, the USD was higher and US equities fell,” National Australia Bank said. “Stronger PMI data out of the US was the proximate driver, and while those did come in much stronger than expected, the context of upside surprises in US economic data having been rare for the last month or so may have supported the size of the market reaction.”
Some market watchers said the US weakness is not unexpected as investors prepare for a three-day weekend, and opt to take profits given the market’s overall strong month. US markets will be closed on Monday for Memorial Day.
