Wall Street may have a strong reason to keep this market calm for one more week.
Anthropic prices its IPO next Wednesday. Nearly every major bank on the Street has a hand in the deal.
That’s my conspiracy theory for today’s rally. Tech is still playing musical chairs underneath it.
The S&P 500 ripped higher on Veterans Day. The bond market sat closed.
The index spent most of the session pinned at the upper edge of the week’s expected move. It looks like equities are waiting for bonds to reopen before they make a bigger push.
The morning traded like a 50/50 advance decline line. Financials and energy joined in as the day went on.
Big tech didn’t follow the rest of the market today.
Last week, the semiconductors got hammered. Amazon and Microsoft caught huge bids during that selloff.
Now the semis are ripping back. Microsoft, Amazon, and Meta are getting sold.
Money keeps jumping from one tech seat to the next. I don’t like that bifurcation one bit.
It tells me real trouble still sits inside tech, even with correlation picking up across the broader market.
I watch the rip back more closely than the selloff. A violent bounce like this one in the semis checks the volatility box for me.
Volatility has come down. I watch the volatility futures and VVIX more than the VIX itself.
I still wouldn’t put the volatility helmets away yet. The Anthropic IPO matters for tech, and it matters even more for the financials.
In tonight’s video, I break down who’s involved in the deal and what the options market is pricing into Friday:
- Goldman Sachs is backing the Anthropic IPO. Morgan Stanley is serving as the stabilization agent.
- JPMorgan is selling the shares. Citi is handling international sales. Bank of America is the one major bank left out.
- Anthropic shares look set to start trading Thursday, November 19.
- The options market priced a $221 expected move in the S&P 500 this week. The index hit the upper edge near 7600 and trades around 7625.
- The Nasdaq jumped 2.5% today. Microsoft fell 2.5% in the same session.
- The S&P 500 still has $71 of expected movement priced through Friday’s expiration.
I don’t think the problems in semiconductors and AI have resolved. Volatility hasn’t resolved either.
The IPO calendar might just keep things dampened for now. I’m already looking at building a couple of short positions in the semiconductors on this bid.
