Ok, I’m gonna to do a little preachin.’ You can take it or leave it, and I swear to Christ I don’t care which.
I’m not a day-trader. If you are (a day-trader), we wouldn’t get along and this probably isn’t the place for you.
Further, I’m not the Ben Rickert character a lot of you want me to be. If you don’t know who I am by now, you should at least know what I am, what I was and, more to the point, what I’m not and never was.
The daily market color I pen is the most-read content on the site, and it’s not close. That same color (the market commentary) is also the least valuable content on the site, and that isn’t close either.
I write about the zigs and zags on the terminal — a piece of equipment I waste an enormous sum of money to access every year — because market color keeps readers engaged. As long as you’re engaged, you’ll invariably find your way to the content that actually matters — the Monthly Letters, the socioeconomic color and so on.
To me, that’s worth it. I’ll gladly write about a subject that doesn’t interest me and pay tens of thousands of dollars for the contraption I need to facilitate that writing if it means creating and sustaining an audience for my lengthy musings on matters of crucial societal import.
I mention (reiterate) all of that on the occasion of a see-saw session on Wall Street, where the intraday range for the S&P was among the largest in years. The swing miffed and confused a lot of people, some of whom reached out to me assuming I cared, or had some answers. (Bad news on both scores.)
Care though I don’t, I feel obliged to say something. Otherwise I’ll keep getting mail about what the mainstream financial media described as a “stunning reversal.” So here we are. I’m saying something.
I assume this goes without saying, but you need to express the intraday range as a percentage of the prior day’s close. The figure below puts Thursday’s session in context.
The swing was indeed pronounced, but when put in context, it doesn’t look nearly as anomalous as it would if you simply charted the range in index points. The figure also serves as a reminder of just how insane April 9 was. That was the session Donald Trump triggered one of the largest single-session rallies ever by pausing his “reciprocal” tariffs.
So, what happened? Why did what, as of Thursday morning, was a rousing Nvidia-inspired rally morph into a rout by Thursday afternoon?
Again: I don’t know. Again, again: I don’t care and I don’t think you should either, because if it was anything worth fretting about, we’d all be able to identify the catalyst.
Some pointed to Nvidia’s accounts receivable (which were up 45% in Q3 versus Q1), but that was right there for everyone to see on Wednesday evening. And it’s not exactly as if no one was looking at the company’s results.
Other observers noted that Bitcoin took another leg lower, the implication being that what’s now a 30% plunge for “digital gold” is starting to spill over into traditional assets through various channels. That’s a plausible narrative, but given that Bitcoin tends to trade like a risk asset in a down market — and can demonstrate a very strong correlation with the Nasdaq 100 in challenging environments — it’s a bit of a chicken-egg dilemma.
Still others suggested risk assets are getting more worried about a recalcitrant Fed, but the market-implied odds of a December rate cut actually rose on Thursday despite a robust headline hiring print from the BLS. (Apparently, someone was paying attention to the UNR, which nearly rounded up to 4.5%.)
Tellingly — and this, more than anything else, underscores my contention that the belabored search for casualty vis-à-vis the vagaries of any one session is an exercise in futility — every mainstream media outlet changed their narrative to fit the price action Thursday.
Early on, Nvidia’s results “dispelled bubble fears.” By the time the closing bell sounded, Nvidia’s “surprisingly strong earnings failed to allay investor worries about lofty valuations,” as Bloomberg put it. The price action is the narrative, folks. “Why?” is thus a meaningless question.
Now stop worrying about Nvidia and go read one of the Monthly Letters. You’ll thank me later.
Still, Qs going from >50D to <100D without putting up the slightest fight is . . . and there is a bunch of accelerant in the system.
They don’t care on Main Street, John. Really they don’t. 99% of America thinks “50D” is a bra size.
And this comment really underscores my point. Life is far, far too short. There’s so much to learn and so little time. The idea that we — any of us — are fretting over whether one line didn’t “put up enough of a fight” while traversing the space between two different averages of itself is as manifestly insane as it is sad.
While I’m at, let’s tell the truth: The notion that regular people are actually concerned about any of this, on any level, is just pure, unadulterated bullsh-t. I had dinner at a neighbor’s house two Tuesdays ago. They’re well off and guess what? Neither one of them had ever even heard of Nvidia. I’ve been out to dinner probably 150 times since mid-2023 in cities and towns across the Southeast and not one time — not once — have I overheard, let alone engaged in, a substantive (note the emphasis) conversation about Nvidia, the stock market or AI.
This is a bubble, alright: And we’re stuck inside it, telling each other that the fate of the world depends on the ebb and the flow of a story which, in fact, almost no real people have ever even heard, let alone give a damn about.
As ever, the disconnect between Wall Street (where surveys would have you believe every second person you see is obsessing over AI) and Main Street (where people are obsessing over the same things they always obsess over, namely how to make ends meet) is so vast as to be laughable.
Sure, upper-upper-middle-class people with equity portfolios and retirement accounts of, say, > $4 million have a lot at stake given Nvidia’s weight in the benchmarks, but this matters very, very little for the typical American. They just don’t own enough stock to care.
Yes, this is largely a game for the few, but it’s the game we chose to play so we care even if non-players needn’t, and when things get extreme enough the game can spill over into the Real World, usually in a bad way. By then, if we have played particularly badly, we may be blown out into that Real World ourselves, trying to figure out how to make a living without playing the game . . . the horror!
I’m amazed that AI hasn’t come up at all for you. I live in an upper middle class area and it’s all the dads on the playground talk about. Guy who works for salesforce is worried he’s going to lose his job to AI. Guy who works for Verizon, same deal.
Mom who works on contracts for a non profit, astounded by how much more she can do bust also worried for what that means for her team.
Every parent concerned about how to raise their kids to not be absolute. It’s completely pervasive.
I’m amazed that AI hasn’t come up at all for you. I live in an upper middle class area and it’s all the dads on the playground talk about. Guy who works for salesforce is worried he’s going to lose his job to AI. Guy who works for Verizon, same deal.
Mom who works on contracts for a non profit, astounded by how much more she can do bust also worried for what that means for her team.
Every parent concerned about how to raise their kids to not be obsolete. It’s completely pervasive.
“It’s all dads on the playground talk about.” “Mom who works on contracts for a non profit”
Those quotes right there are not reflective of Main Street.
Dads on the playground? I mean, my man, Main Street dads don’t have time to be hanging out at any playgrounds, and Main Street moms aren’t working on contracts for non-profits.
You folks are wildly detached from the reality of 75% of America. The notion that average “dads” are hanging out with their children at “playgrounds” and debating AI is giggle-inducing, and that’s the sort of obliviousness which is costing Democrats elections.
“Well, if we can just speak to the American Everyman — you know, the dads in Southern Tide polos and khakis sipping frappuccinos through straws at the community playground in the Toll Brothers planned neighborhoods — we’ll be in good shape!”
Jesus Christ, folks: Those are not real people.
I get it. Most of you are in the “Hey Brandon, get on the bag” crowd (https://www.youtube.com/watch?v=junIx1T8A5I). But that’s not Main Street.
Here is my take: Nvidia chips in the hands of the algorithm computers were anticipating a Nvidia downside miss on earnings. As a result of beating earnings and promising a better than expected forecast, and because the algos have now been supercharged with Artificial Intelligence, those same chips that Nvidia sold last quarter, turned on Jensen to punish him for “too good” results and a “too good” forecast.
I am trying to take a more practical view. If I am a fund manager, and I want to post some good numbers for this year, now is a good time to take some profits and then see if a “Santa Rally” materializes, rather than the other way around. It’s been a good run, and Thanksgiving is nearly upon us. No need to sweat every last dime.
This morning I looked and said oh nice.
Busy day too busy to sell or buy.
I think you’re thinking is my thinking.
Profits and dry powder day for quite a few folks. Itchy trigger fingers will show up.
Agree with t dog, not that I traded today..
No tears here. Took advantage of today’s action to eliminate or reduce many positions at much higer prices and finished black once again.
P-
Many thanks. My inability to understand much of the financial content alongside the fact that the remaining commentary is the most resonant thing I read daily has been disconcerting. I’ve no doubt the market analysis will not be what your contribution is measured by. At your Star Chamber Trials or in the minds of your fans among whom I count myself.
There’s no money in AI, beyond replacing workers. With a laughable social “safety net,” there’s a tiny problem with the profit plan.
Also, the social disharmony promises to be Facebook 10x. AI is going to have everyone drowning in BS content.
Certainly the monthlies, but these market pieces are so entertaining. Perhaps small pleasures for this small mind. Thank you
Look, I’m obviously grateful for every read from every reader on every article no matter what it’s about. I just want to give something back to people that’s more than me talking about financial assets, because as we all get older, we all learn (or most of us do) that money isn’t really all that meaningful. I want my readers to remember that I gave them something other than editorials about money. It’s also important (to me anyway) that you all know me for me, not for someone I pretend to be just to generate market-based web traffic. Lately, after the last several monthlies, some of you are starting to email me using my real name which is nice because frankly, I haven’t heard it very often for over a decade.
I wish to suggest that you could certainly do both: stop pretending to be someone just to generate market-based web-traffic, and still provide us with your great insight into a very complex world that many of us still struggle to understand: social, political, and economic. Honestly, that is kind of how I have seen you for some time now–although you seem to prefer a certain amount of privacy, for reasons that I always assumed were rather personal. My name is Theron by the way. And while I am sure you could have looked that up from my subscription information, I wanted to share it with you personally, especially because you have now ventured to reveal just a little bit more about yourself.