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DJIA: 45,637
A likely rate cut… that’s worth 800 Dow points? Seems a bit of a stretch, especially with an inflation number out as you read this, and another CPI and Employment number yet to come. Don’t waste a lot of analytical time on this, it’s never about the news – it’s about the market’s reaction to the news. And, of course, it’s not about the 800 points, it’s about the 10-to–1 up-day in the A/Ds. We will be the first to say one day is just that, but recall just a week ago the back-to-back 4-to-1 up days, rare and very positive in a market near its highs. Even NYSE stocks above their 200-Day moved above their recent range to a more respectable 61%. It is Tech’s world, but you don’t see A/D numbers like these without the Financials. There are a lot of them, and they act well.
Heraclitus, an analyst of years gone by (400 BC), once observed you don’t step in the same river twice. You’re not the same person, and it’s not the same river. We know markets change, do analysts? Back in 1972 it was nothing to pay an outrageous 30x for Tropicana. We still drink the stuff though the company has long been merged away. We also have had trouble finding film for the Polaroid. The 50 really were nifty, but knowing their outcome makes it tricky paying up these days for AI. Please, don’t say this time it is different – words that have cost investors millions. Then, too, that’s why it’s good to be a technical analyst. The trend is your friend until it isn’t, and that’s why God made stops.
Nvidia (NVDA – 180) beat on the top and bottom lines, who didn’t see that coming? The stock hasn’t reacted well so far, looking at the last few reports who didn’t see that coming? Wednesday’s after hours fall though modest by Nvidia standards, came to something like $150 billion. By way of perspective, that’s enough to buy Pfizer (PFE – 25). Meanwhile, if the Tech /AI trade should cool for a while, and with a rate cut on the way, it could further benefit financials.
Frank D. Gretz
PLEASE NOTE: Unless otherwise stated, the firm and any affiliated person or entity 1) either does not own any, or owns less than 1%, of the outstanding shares of any public company mentioned, 2) does not receive, and has not within the past 12 months received, investment banking compensation or other compensation from any public company mentioned, and 3) does not expect within the next three months to receive investment banking compensation or other compensation from any public company mentioned. The firm does not currently make markets in any public securities.
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