Sunday Slice Report
Historically one of the more wild weeks we've seen in years and some first time records. We saw the VIX jump 70% (its third biggest one day spike since 1990, and 5th largest ever), the Nasdaq 100 had its worst day since 2020, chip stocks had their worst day in more than six years, and almost 3 trillion in the stock market was lost (possibly the largest ever single day loss). Every time we say the words "this has been a wild week" it seems the next few weeks decides to step it up. Now we have the CEO of NVDA sleeping with a Chinese spy putting more pressure on the largest company and leader in AI to figure out if this is going to lead to more panic and selloff.
CPI and PPI this week, job data Friday increased the chances of another rate hike
This would have been a great week for nothing major but that doesn't seem like it's going to be the case with inflation now in control of stopping the bleeding or adding more fuel to the fire. A rise in inflation here will just further increase the chances of a rate cut but the market would react strongly to a decrease in inflation so that could be the silver lining of the week.
$S&P 500 in correction territory after losing diagonal and fears of losing horizontal
The markets are great at driven the markets higher before the dumps which was a big thing we saw happen after the elections. Got a pump right after only to see the then historic sell off to follow after policy fears of the Democrats slowing down AI. We'll see if any news that's actually substantial about Iran comes out but what we'd need to see to slow the bleeding and get a more convincing bounce or reversal is:
- True end of the Iran war/lower gas prices
- Inflation back to coming down which eases the feds rate hikes
- PPI/CPI printing lower than expected this week
- AI demand and fear of slow down goes away
- Sectors outside of risk off ones start rebounding and bringing back liquidity
Most sectors got crushed which is rare to see that even one day not a single major one was green
Overall some of the defensive hedges finished green on the week and some random ones like gold miners did ok but the part that makes this correction seem more serious is that a lot of liquidity actually got pulled out it didn't just rotate. If we can see at least defensive or hedge sectors go up that's at least more reassuring or if VIX can come back down below 20.