Market Sentiment Stays Positive As Bitcoin Soars And Nvidia Recovers

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Markets often demand perfection, and this was evident in Nvidia’s performance. Despite posting better-than-expected third-quarter results and issuing strong guidance, Nvidia’s stock initially dipped moderately before surging higher.

Some analysts expressed concerns over slowing revenue growth, suggesting that the most optimistic estimates in Nvidia’s forecast were not exceeded, leading to the initial pullback. It remains to be seen whether bargain hunters will step in or if growth and momentum investors will exit the stock.

Overall, market sentiment remains positive, bolstered by Bitcoin crossing the $98,000-mark last night and briefly touching $99,000 today. Traders are hopeful that the new administration will introduce more supportive regulations for the crypto industry.

Economic data presented a mixed but generally negative picture. Initial jobless claims fell to 213,000 from last week’s 219,000, but continuing claims rose to 1.908 million from 1.872 million. The manufacturing index also slowed significantly, dropping to -5.5 in November from October’s +10.3, indicating growing economic weakness.

The Dow and S&P 500 achieved solid gains, driven by a significant short squeeze, while the Nasdaq lagged and barely stayed in positive territory as major tech stocks, including Google, took a hit.

Bond yields edged higher, yet utilities surged, with XLU adding 1.75%. Crude oil recovered its $70 level, and the dollar rallied to near recent highs.

Gold had a strong day, crossing its 50-day moving average and marking its fourth consecutive day of gains after six straight days of losses.

Bitcoin’s momentum accelerated sharply following the announcement of Gensler’s retirement, briefly touching $99,000 before pulling back.

Will we see Bitcoin reach the magical $100,000 mark by this weekend?

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Bitcoin Hits Record, Retail Stocks Plunge: Nvidia Earnings Anticipated

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The markets opened in negative territory, with Nvidia’s stock slipping ahead of its highly anticipated earnings report. By the end of the session, the major indexes had recovered, closing near their starting points.

Traders view Nvidia’s upcoming report as a potential catalyst to invigorate the market for the rest of the year, especially after the recent pullback from the post-election rally that had propelled the indexes to new highs.

However, last week, Federal Reserve Chair Jerome Powell signaled that he is in no hurry to cut interest rates, which dampened bullish sentiment.

Retail stocks suffered significantly, with Target’s shares plummeting 20% following its largest earnings miss in two years and a reduction in its full-year guidance due to cost pressures and weakening discretionary demand.

This decline dragged down the major indexes, along with the retail ETF and other retail giants like Costco, Walmart, Dollar Tree, and Home Depot.

This situation reflects the challenges consumers face in an inflation-plagued environment. Given that consumer spending accounts for 67% of GDP, the markets may soon recognize that the economic data might be more hype than reality.

The Mega-Cap tech sector experienced a sharp decline but managed to rebound, mitigating early losses. Bond yields ended the day slightly higher but showed significant intra-day volatility.

Gold prices rose for the third consecutive day, while Bitcoin hit another record high close to $95,000 before pulling back slightly at the end of trading. The dollar rebounded from Monday’s losses, and crude oil prices slipped in afternoon trading.

All eyes are now on Nvidia’s earnings report, due out this afternoon, which many traders consider the most crucial announcement for the remainder of the year.

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Bitcoin Nears $100K As Major Indexes Recover From Early Losses

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Geopolitical tensions between Ukraine and Russia initially dragged the markets down, exacerbated by the U.S. administration’s approval for Ukraine to use American weapons to strike inside Russia, raising fears of a potential World War III scenario.

Despite this, the Nasdaq was the first of the three major indexes to recover, buoyed by a 2.4% rise in Nvidia’s stock ahead of its earnings release.

However, the persistent escalation of war rhetoric and uncertainty about the incoming administration’s response could lead to further market volatility.

By the end of the day, the major indexes rebounded, partly due to headlines suggesting that Iran is seeking to de-escalate tensions, which helped stabilize the markets.

On the economic front, Walmart’s stock surged 5% on strong earnings and an improved outlook on discretionary spending. Tesla also added another 2%, bringing its month-to-date rally to 38%, marking its best month since January 2023.

Additionally, the most shorted stocks were squeezed higher, the Mega-Cap Tech basket rebounded, bond yields slipped due to disappointing U.S. macroeconomic data, and gold prices increased.

Bitcoin continued its ascent towards the $100,000 mark, climbing above $94,000 to set a record high before pulling back slightly at the close.

Will $100,000 present a glass ceiling for Bitcoin, or will it break through this milestone?

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Gold Rebounds, Crude Oil Recovers As Major Indexes Show Mixed Results

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The major indexes ended the day with mixed results, as only the S&P 500 and Nasdaq managed to close in the green. The Nasdaq received a significant boost from Tesla, which surged approximately 7% following news of potential regulatory easing for self-driving vehicles.

Traders are now turning their attention to Wednesday’s earnings release from chip giant Nvidia, which could influence the market’s near-term direction. Additionally, upcoming reports from key retailers are expected to provide valuable insights into consumer behavior and the broader economy.

Last week was challenging for the major indexes, which retreated from their post-election highs due to concerns about the Federal Reserve’s interest rate trajectory. Despite the Fed’s accommodative stance, having lowered rates by 0.5% and then 0.25%, the markets reacted negatively, with the 10-year yield rising sharply instead of falling.

Bond yields initially spiked but then lost momentum, reversing course, and closing lower. Bitcoin underwent a volatile session, trading within a range and ending slightly higher, maintaining its post-election gains. Gold, after a recent sell-off, rebounded with a 1.7% gain, while crude oil also recovered, reclaiming the $69 level.

Interestingly, Bitcoin and gold, which had been rallying in tandem, diverged after the election. Bitcoin surged higher, while gold faced profit-taking.

Will they be able to sync up again?

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ETFs On The Cutline – Updated Through 11/15/2024

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (245 vs. 196 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For November 15, 2024

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

FED’S CAUTIOUS STANCE HALTS POST-ELECTION RALLY

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The major indexes opened lower as the post-election rally came to an abrupt halt following Fed Chair Powell’s comments yesterday that he is “in no hurry” to continue cutting rates.

This statement put significant pressure on equities, casting doubt on the foundation of the recent market surge and accelerating the trend reversal seen early on.

It appears that last week’s rate cut may be the final one for this year, as hopes for another cut in December have dissipated.

Equities surrendered some of last week’s substantial gains, but traders remain optimistic that this pullback will be limited due to strong seasonal trends, as I highlighted in yesterday’s chart.

The eagerly anticipated retail sales report showed a 0.4% increase in October, surpassing the 0.3% forecast. However, this increase reflects higher prices rather than increased consumer activity, indicating that consumers are paying more for the same goods due to inflation.

The “good news” of improved US macroeconomic data turned into “bad news” as both inflation and growth surged, which is not the kind of data the Fed prefers to see. This development has significantly reduced expectations for further rate cuts.

For the week, energy and financials were the only sectors to end in the green, while healthcare performed the worst. Mega-cap stocks lost all their post-election gains, as noted by ZH.

The most shorted stocks underwent a round trip during the first half of November, while bonds continued their trend towards higher yields, with the 10-year yield touching 4.5% before pulling back at the close.

Gold also dropped, experiencing its worst week since June 2021, falling to two-month lows due to the dollar’s strength, which was bolstered by higher yields.

Meanwhile, Bitcoin had its best two-week run since March, hitting new records and maintaining its $91k level, making it the top performer with a gain of over 36% in the last 30 days.

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