Financial News vs. Noise
What a difference a couple of days makes. Last week every rip got sold, this week every rip is getting bought. Earnings now take center stage until PCE on Friday. The $493.86 spot looks like a good low on SPY, which also had an undercut and rally at the 10 day.
Similar look on the QQQs, with $413.07 as a low.
You could see both of these charts reversing and continuing the uptrend, you could also see them bump up against the 50 day’s and come right back down again. I think earnings are going to have a lot to say about where they go from here. I do think you need to be somewhat cautious here, unless PCE comes in cool or someone important pulls a NVDA on their earnings, as for the moment we do not have an accommodative Fed. Speaking of the Fed, it continues to look like rates don’t want to go any higher here, weaker PMIs helped. Watch 4.7%.
Even though the 10 yr has risen 72 bps this year and rate cut expectations have gone from 6 to maybe 2, the Bloomberg Financial Conditions Index is easier today than at any time in 2023. As long as it stays that way the bears may get some traction from time to time but the bulls are in charge.
Speaking of earnings, TSLA was the big one last night. I am not a fundamental guy and the people that are seem to be up in arms about TSLAs report, but it is above $160 at the moment, which is a U&R at the 10 day and an area of significant resistance. My trend and counter trend models are both long, but if I was playing this as a trade my preference at the moment would be shorting here. TSLZ (2x inverse TSLA) had a massive inflow yesterday which was interesting. I assumed after the downturn we would see more people betting on than against.
Opinion: Elon Musk gives Wall Street what it wants, but more pain could be around the corner-MarketWatch
So with so much competition emerging in EVs, especially from China, how is Tesla going to remain competitive if it cannot even produce a $25,000 vehicle? One big Chinese EV maker, BYD 1211, +1.87%, now has a subcompact EV that starts at less than $10,000 in China.
This is interesting. Of course AI is a theme that dominates my portfolio at the moment, and it is more than just NVDA. The data centers are another ancillary way to play. Why the AI Industry’s Thirst for New Data Centers Can’t Be Satisfied Supply bottlenecks slow the scramble to build bigger, more powerful facilities-WSJ
“With what we’re seeing, the fervor to build is probably the greatest since the first dot-com wave,” said Hydra Host Chief Executive Aaron Ginn. He said the search for the right parts and space has taken months longer than expected.
The demand for computational power to create AI systems has surged since late 2022, when OpenAI’s ChatGPT started showing the technology’s potential. Demand for computer servers equipped with new generations of AI chips—the most popular of which are graphics processing units, or GPUs, from Nvidia—is overwhelming existing data centers.
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