
- Moving the markets
The markets rebounded today after a Pre-Valentine’s Day massacre yesterday. Traders were feeling the love again as they shrugged off a higher-than-expected inflation report that spooked them on Tuesday.
They worried that the Fed might not lower interest rates soon enough to keep the economy humming. The market had been overheated for a while, but it’s not yet in the bargain bin.
There could be more bumps ahead, but I don’t think this is the end of the road for the bulls. I think this is a healthy correction that will set the stage for more gains later.
Small caps stole the show today, recovering most of their losses from yesterday. Nvidia also had a good day, briefly surpassing Alphabet in market value. The chipmaker is one of the “Magnificent 7” stocks that have been driving the market higher.
The Russell 2000, which tracks small cap stocks, jumped more than 2% today, beating the big three indexes by a wide margin. That’s a big turnaround from yesterday, when the index plunged 4% while the S&P 500 only fell 1.4%.
The most hated stocks also bounced back today, recouping more than two-thirds of their losses from yesterday. The Mag7 tried to do the same, but they were not as lucky. Bond yields fell and then rose again, reversing some of their moves from yesterday. The dollar gave up some of its gains, while gold stayed put at $2k.
There’s an interesting chart that compares Nvidia’s price action with Cisco’s from 1999 to 2004. It looks eerily similar.
Could Nvidia follow Cisco’s fate?
Read More