Financial News vs. Noise Newsletter

Interesting day. They tried to keep the momentum from last week going but failed shortly into the session and the QQQs ended up down almost 1%. Think the news out of PDD probably played a role

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This has been one of the strongest Chinese names, but yesterday's earnings and comments from the CEO obviously disappointed.

PDD’s $55 Billion Stock Crash Sends Warning on China Economy-Bloomberg

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You also saw a bit of profit taking on NVDA ahead of earnings, which is to be expected as it's had quite a rally since early August.

I've been hoping for a pullback to add equity exposure, yesterday wasn't much of a pullback but it may be all we get. I still think investors ought to be cautious ahead of NVDA earnings tomorrow night.

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This is interesting. As you may or may not know, we are launching a politically neutral ETF in September. The idea is that companies that stay out of politics, left or right, should do better than companies who's focus is on anything other than making money. We have some data to back that up as well. Looks like Zuckerberg wants to move META to politically neutral. Coincidentally, showed up on two of my models as a possible long entry today. One would trigger if it drops 2%, the other at 4%. Looking at the chart prior to this move it looks double toppy though, but could find support at the 20 day EMA or 50 day MA.

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Mark Zuckerberg Says White House Was ‘Wrong’ to Pressure Facebook on Covid-WSJ

Meta PlatformsMETA -Chief Executive Mark Zuckerberg said it was improper for the Biden administration to have pressured Facebook to censor content in 2021 related to the coronavirus pandemic, vowing that the social-media giant would reject any such future efforts.

In a letter to House Judiciary Committee Chairman Jim Jordan (R., Ohio) that touched on a series of controversies, Zuckerberg wrote that senior Biden administration officials, including from the White House, had “repeatedly pressured our teams for months to censor certain COVID-19 content, including humor and satire, and expressed a lot of frustration with our teams when we didn’t agree.”

This stuff is always stupid. Any way you look at it, the stock market is dangerously overvalued now-MarketWatch

S&P 500 is almost as pricey as it was at the January 2022 bull-market top

That was the start of a Fed hiking cycle, we are now at the start of a Fed easing cycle. No comparison.

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Not bad advice here. NVDA option IV is going to be juiced, you could be right on direction and still lose money. I come into most days with S&P puts, and definitely will for Wednesday night. I would suggest figuring out a way to pay for them though. Was looking at an ETF yesterday, that will remain nameless, that uses 10 year  Treasuries to try to pay for SPX puts. Since inception it has failed miserably. May be a market for something better :)

Nvidia’s earnings may swing the stock market this week. Here’s how to hedge it, BofA Global says.-MarketWatch

Put options on the S&P 500 offer better protection than Nvidia-based hedges against earnings risk, BofA Global Research says

Huge believer you always have to have an eye towards the future. Long time readers know that I am a big believer that AI is going to be huge, and that we are only in the early innings. With anything like this you have the leaders, and then things spread to all the other stocks. As much as I hate the weight loss drugs I cannot ignore that there is some huge potential. Outside of LLY and NVO there are bound to be other winners.

Obesity drugs’ next wave: These companies could snag 20% of GLP-1 market, analysts say-MarketWatch

Companies mentioned in the article: AMGN, VKTX, GPCR, SRRK, ZLDPF, CRBP

I would urge you to do some homework here.

Weight-Loss Drugs Get More Good News. For Investors, It’s Still Too Soon to Celebrate.-Barron's

But all of the optimism is overlooking a key factor: the healthcare system’s ability to pay for it all. Zepbound costs nearly $13,000 a year.

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