Coca-Cola is up 43% this year. Procter & Gamble just posted its fastest rally in roughly 15 years.
Berkshire Hathaway sat flat until October. It’s since added about $200 billion in market cap in a couple of weeks.
The market is screaming duck and cover. Capital is running for safety while the Nasdaq rolls over.
Nvidia was up 30% on the year at one point. It now sits down about 14% year to date.
Jensen is out. The CFO who became CEO now runs a company that acted as a lending facility for GPU buyers like CoreWeave.
I’m not convinced that financing sticks around. It’ll take time for those skeletons to come out of the closet.
The money that left Nvidia went somewhere riskier. It flooded into higher volatility names like AMD, Broadcom, and Micron.
I read that as a hard negative. The next Nasdaq hit will land harder on every one of those names.
We got a preview at today’s bell. AMD, Micron, Intel, and the whole SMH group took a beating.
The rest of the capital ran for cover. Consumer staples ripped higher, with Walmart playing the role of market savior.
Procter & Gamble is up 20% year to date. Its rally started right when the Nasdaq began to sell off.
I’ll admit I was on the wrong side of Berkshire. It now carries a $1.2 trillion market cap.
These rotations have never worked in the past. They always end with heavier correlation.
The S&P 500 looks quiet because it’s stuck in the middle. The Nasdaq is diving while staples and Berkshire rip higher.
That standoff is coming to a head. Once correlation kicks back in, the 50/50 advance decline line disappears.
A falling Nasdaq will drag everything down with it. Tonight’s video lays out the levels I’m watching next week:
- The SPX priced a $221 expected move this week. The rally ran right to the upper edge of that range.
- Next week still prices about $150 of expected move. That number isn’t set in stone yet, but it tells you to keep your helmet on.
- S&P 500 futures pulled back to 7560. That level marks the dead center of trade on a 180 day, 4 hour chart going back to May 4.
- The Nasdaq needs to reclaim 29,000. As long as it sits below that level, I see the market in trouble.
- The CME FedWatch tool shows roughly a 90% chance of a quarter point hike at the December 9 meeting.
- The 2 year and 10 year yields sat only 0.3% apart at the start of the month. A yield curve inversion could arrive early next year, and that’s a recession signal.
Anthropic’s IPO prices next Wednesday and trades Thursday. I don’t expect it to rescue the Nasdaq.
Keep your helmet on heading into Thanksgiving week.
