the bottom is in
market vibes
August 26…)
"But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" Alan Greeenspan December 5, 1996
Data on tap today:
A mixed bag of releases this morning, none of them algo-sensitive, in my opinion. BLS durable goods at 8:30. Then Redbook, home price indexes, and Case-Shiller housing data at 9:00. Consumer confidence at 10:00 might be worth a look (expected higher, 97 vs. 96).
A 2-year auction and money supply at 1:00 PM. The API is forecasting a crude oil draw of 2.4 million barrels at 4:00 PM.
In the news
Trump fired Lisa Cook after the close yesterday. Apparently, she intends to defy him and continue to serve, putting it on Powell. My guess is Powell will use the “presumption of innocence” to deflect the issue to the courts, but the whole affair has a bad sniff. It certainly adds a new dimension of taint to the extensive list of FOMC investigatees.
Via Telegram: The U.S. Geological Survey (USGS), a branch of the U.S. Department of the Interior, proposed adding copper, silver, and potash, among other minerals, to the draft 2025 List of Critical Minerals yesterday. The proposal was published in the Federal Register, noting copper critical for transportation, defense, and the power grid; silver for electronics and solar panels; and potash for fertilizer production.
In Europe, equity markets in France are lower, and interest rates are higher as the government is “likely to lose” a snap vote of confidence on September 8, announced yesterday by Prime Minister François Bayrou (FT). Trump levied new tariffs of up to 25% on over 400 categories of British goods, ostensibly to protect U.S. products.
A potential government shutdown next month is a rising item in daily news coverage.
In the markets
S&Ps continue to sell off after the close yesterday and steadied into the current range in Asia and London.
NVDA is the head of the pin upon which 10,000 angels dance. Despite a period of consolidation, the trend looks solidly in force. I would not sell this chart above the August 20 lows of 168.00. Even then, I’d want to see negative development under the 55 MA (green line) and a credible bearish narrative.
However, NVDA is not the stock market. It is easy to forget the September NDX made its all-time high on August 13 and experienced a period of notable liquidation as the Dow curiously outperformed. NDX futures are exhibiting a rare and very close correlation to open interest, which is useful for directional analysis. Right now, this chart is, on balance, negative, notwithstanding the greater trend.
More on stocks, oil and bitcoin this morning straight ahead …and a little philosophizing on Chicago … in the vibe.
