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- 📊 The Wall Street Elevator
📊 The Wall Street Elevator
Ticker Tea
March 11, 2024
Good Morning & Happy Monday ☀️
This morning the futures market is pointing towards a lower open with the DJIA -140pts, S&P 500 -18pts, NASDAQ -93pts.
"up the stair case, down the elevator" is a metaphor frequently used on Wall Street to describe the nature of stock markets, where stock prices tend to rise slowly and steadily, similar to taking steps up a stair case, but can fall rapidly and sharply, akin to the swift descent of an elevator.
Stocks ended lower on Friday, with major indices experiencing declines after an initial rally. The movement has traders contemplating whether we’re in the elevator heading down a few floors.
Nvidia's shares were up ~5% Friday morning after a violent reversal ending -5.5% on the day, interrupting its recent substantial gains. The last time the stock was up at least 5% intraday but ended the session more than 5% lower was June 2017 👀.
Other notable losers on Friday: Costco (-7.5%), Broadcom (-7%), Arm (-6.5%), MongoDB (-7%), Abercrombie & Fitch (-7%), Williams-Sonoma (-5%). Quick note: I recommend Finviz for a user-friendly stock screener which has countless filter/sort functions.
The February jobs report presented mixed indicators, suggesting the economy remains strong with higher-than-expected job additions, but also showed an increase in the unemployment rate and subdued wage growth.
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» Investors brace for another potential shock from the upcoming CPI report (Tues), wary of the impact on the S&P 500's robust gains amidst rising inflation concerns. Despite the index's best streak since 1964, fueled by strong earnings and a resilient economy, stubborn inflation could challenge the Fed's rate path and market optimism. (link)
» Bitcoin mining is experiencing a surge in investment and energy consumption, driven by the cryptocurrency's price runup and anticipation of the halving event. This increase in activity, marked by a record $1 billion investment in mining rigs and a significant rise in power usage, reflects both the lucrative potential and looming challenges of the sector. (link)
» Abercrombie & Fitch ($ANF) shares faced their worst week since August 2022 after a year of outperforming the market, including AI giant Nvidia, as Wall Street grows skeptical of the retailer's future sales growth. Despite a 511% rally fueled by strong demand from younger consumers and improved profitability, concerns over sustaining this growth have cooled investor enthusiasm. (link)
» Nvidia's ($NVDA) dramatic intraday reversal from a significant gain to a 5% loss exemplifies the potential volatility in momentum stocks, signaling a cautionary tale for investors amidst a booming market. This abrupt shift in one of the market's leading AI stocks provides a glimpse into the consequences of a broader momentum unwind, challenging the sustained rally's resilience. (link)
» Wall Street is witnessing a resurgence in short-volatility investments, with assets in ETFs that sell options for returns soaring to $64 billion, marking a stark contrast to the AI-driven market highs. This revival, riding on the quest for steady profits in a calm market, raises concerns about potential market shocks amidst major upcoming events like the US presidential election. (link)
» Walmart ($WMT) is making strides with its generative AI search capabilities, aiming to become a one-stop shop for event planning and shopping needs, potentially sidelining Google's ($GOOGL) traditional search engine role. As retail giants like Walmart and Amazon ($AMZN) incorporate AI to enhance user search experiences, Google faces pressure to innovate beyond advertising-driven search models. (link)
Major earnings releases scheduled the next five business days 👇
Click here for a comprehensive list of earnings scheduled over the next 5 days (mkt cap $1bn+)
Economic results from yesterday are below, along with today’s schedule 👇 Click here for full schedule & live updates of Wall Street estimates.
Wake up determined, go to bed satisfied.”
Dwayne "The Rock" Johnson
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