Market Overview - US stock markets experienced a broad decline on Monday, with the Dow Jones Industrial Average falling approximately 1.18%, the S&P 500 down 0.92%, and Nasdaq retreating roughly 0.84% [7] - Futures tied to the Dow rose about 52 points (0.17%), S&P 500 gained approximately 0.22%, and Nasdaq 100 futures were up 0.31%, indicating cautious optimism ahead of significant corporate earnings and economic reports [7] Key Catalysts - Nvidia's upcoming third-quarter earnings report is a major catalyst for futures traders, with strong results potentially boosting AI sector sentiment and lifting futures, while signs of demand slowdown could pressure markets [5][7] - Economic data releases, including a significant jobs report, are expected to influence trading sentiment and provide clarity on consumer resilience [7][8] Federal Reserve Insights - Current futures imply a 39-45% chance of a December rate cut, a decrease from nearly 70% earlier in the fall, reflecting tempered market expectations [6][7] - Upcoming economic reports, including jobs data and Fed meeting minutes, are anticipated to amplify market moves depending on their alignment with economic expectations [6][7] Sector Performance - There is investor caution in tech sectors due to concerns about stretched valuations, particularly in AI-related stocks [8] - Defensive sectors are showing relative strength amid worries about economic growth and inflation dynamics [8]

Market Trend Analysis - The S&P 500 Index (SPX) has shown an "orderly" upward trend, with a channel connecting higher lows since May 23 and higher highs since early July, indicating bullish control [1][2] - Recent price action has become less orderly, with a slight close below the bull channel and significant intraday movements, but the SPX managed to close above the 50-day moving average [2][8] Earnings Season and Economic Data - The earnings season has concluded, and the SPX is up 23 points from its October 1 close of 6,711, despite the government shutdown from October 1 to November 13 [4] - The highest close during the shutdown was 179 points above the October 1 level, while the lowest was 159 points below, indicating volatility but little net directional movement [5] Technical Indicators - The SPX is currently wedged between support from the 50-day moving average and previous intraday lows in the 6,630-6,650 range, with the lower boundary of the bull channel around 6,760 [9][8] - The flattening of the 30-day moving average suggests potential resistance at the 6,760 level, which is also 10% above the February 2025 high [8] Upcoming Events and Expectations - Key upcoming events include Nvidia (NVDA) earnings and reports from major retailers such as Home Depot (HD), Walmart (WMT), and Target (TGT) [9] - Economic reports on employment and inflation are expected in the next two weeks, which will influence the Federal Open Market Committee's decisions regarding potential rate cuts [10] Market Sentiment - There has been a decline in expectations for a rate cut, with a 44% probability assigned at Friday's close, down from 67% the previous week, yet the SPX has remained resilient [11] - The optimism among option buyers has decreased, with the 10-day buy-to-open put/call volume ratio rising from 0.42 to 0.51, indicating lower expectations despite stable stock levels [12][13] Options Market Dynamics - Significant open interest in puts and calls around the 6,700 and 6,750 strikes suggests potential pinning action, with the 6,750 strike acting as resistance [16]

Traders are losing their appetite for riskier assets. That’s pretty much the upshot from analysts after Bitcoin’s price slid to $93,000 on Sunday. While the price has recovered slightly, a combination of macroeconomic factors is pushing investors to pull out of so-called risk-on assets like cryptocurrencies and tech stocks with both the S&P 500 and the Nasdaq dropping over the past week. “The latest drawdown reflects broader macro jitters rather than structural flaws,” Kraken’s global economist Thomas P ...

Economic Overview - Japan's economy contracted for the first time in six quarters, leading to a decline in Japanese and Australian equities, while South Korean equities rose [1][9] - US equity-index futures showed a slight increase amid cautious investor sentiment as they await key economic indicators, including employment figures [2][9] Market Sentiment - Investors are navigating mixed risks, including stretched valuations in AI-related stocks and renewed tensions between China and Japan, contributing to a fading risk appetite [2][9] - November has been characterized by volatility in share markets, with concerns about potential corrections due to stretched valuations and a softening US jobs market [2][9] Federal Reserve Outlook - A number of Federal Reserve officials have expressed skepticism regarding the necessity of a rate cut in December, with futures traders reducing the odds of a quarter-point cut below 50% [5][9] - The uncertainty surrounding interest rate cuts has led to an increase in expected bond-market volatility, which had previously been at a four-year low [5][9] Employment Data Expectations - Analysts expect the upcoming non-farm payrolls report for September to underperform expectations of a 50,000 increase, indicating potential weakness in the labor market [6][9] Commodity Market Trends - Oil prices started the week lower, while gold prices increased, with gold having risen over 50% this year, on track for its best annual gain since 1979 [6][9] - Gold was trading around $4,100 an ounce, having lost more than 2% in the previous session, as expectations for a rate cut diminished [7][9] Cryptocurrency Market - Bitcoin has erased over 30% of its gains since the start of the year, following a peak just over a month ago, as enthusiasm for the pro-crypto stance of the Trump administration wanes [8][9]

The likelihood of the Federal Reserve cutting rates at the upcoming December meeting is shrinking, with officials expected to disagree on what the right path forward is for the central bank. Yahoo Finance Fed Correspondent Jennifer Schonberger outlines the details. To watch more expert insights and analysis on the latest market action, check out more Market Domination here: https://finance.yahoo.com/videos/series/market-domination/ #youtube #stocks #investing #fedratecuts About Yahoo Finance: Yahoo Finance ...

Core Insights - The stock market faced a decline despite the end of the longest government shutdown in U.S. history, with the tech-heavy Nasdaq dropping over 2% [1][3] - The reopening of the federal government is expected to alleviate economic pressures from over 1 million federal workers who were unpaid during the shutdown [2] - Concerns about an AI bubble and fading expectations for a December rate cut are contributing to the downturn in tech stocks [4][8] Market Performance - Historically, the end of government shutdowns has been positive for stock performance, with the S&P 500 typically rising more in the one- and three-month periods following a budget resolution [5] - November has been the best month for the S&P 500 on average since 2000, with December often seeing a "Santa Claus rally" [6] AI Bubble Concerns - Investors are increasingly worried that excessive spending on data centers is leading to an unsustainable AI boom, with significant drops in stocks of major AI beneficiaries like Nvidia and Palantir [9] - OpenAI is valued at $500 billion despite not expecting to turn a profit until 2029, while Palantir trades at approximately 240 times forward earnings [9] - Major tech companies are planning to invest hundreds of billions in AI infrastructure, raising skepticism among investors regarding the gap between AI spending and revenue [10] Federal Reserve and Economic Data - The end of the government shutdown has delayed crucial economic data, leaving uncertainty about inflation and labor market conditions, which could impact Federal Reserve policy decisions [10][11] - The likelihood of a December rate cut has decreased significantly, with current odds at 47%, down from 96% a month ago [11]

Core Insights - The stock market faced a decline despite the end of the longest government shutdown in U.S. history, which was expected to positively impact equities [2][3] - President Trump signed legislation to reopen the federal government, alleviating economic pressure on over 1 million federal workers and allowing federal agencies to resume releasing important economic data [2] - The tech-heavy Nasdaq index led the decline, falling more than 2%, possibly indicating a "buy the rumor, sell the news" scenario [3] Market Trends - Historically, the end of government shutdowns has been beneficial for stock performance, with the S&P 500 showing gains in the one- and three-month periods following budget resolutions [5] - November has been the best month for the S&P 500 on average since 2000, and December often sees a "Santa Claus rally," yet current investor sentiment appears cautious due to concerns over an AI bubble and uncertain economic data [6] Sector-Specific Concerns - Tech stocks have been particularly affected by fears of an AI bubble, with significant declines in shares of companies like Nvidia and Palantir, despite the latter's strong earnings report [8][9] - The majority of the S&P 500's worst-performing stocks included high-profile AI beneficiaries, indicating a broader concern about the sustainability of the AI boom fueled by heavy investments in data centers [9]

Market Overview - The market is experiencing mixed signals with S&P 500 futures down over 0.2% and Nasdaq down about 0.5% ahead of the opening bell [3][4] - Monday saw a significant rally with S&P 500 gaining approximately 1.5%, but there is a pullback observed in AI stocks like Nvidia and Tesla [4][6] - Coreweave's stock is down more than 9% after disappointing 2025 sales forecasts despite beating quarterly expectations [5][41] Government Shutdown Impact - The longest government shutdown in history is expected to end soon, with the Senate voting to reopen the government [12][14] - The shutdown is projected to impact GDP by approximately 1.5% in Q4, with a rebound expected to 2.2% in Q1 [15] - The lack of government data during the shutdown has created uncertainty in economic assessments, affecting investor confidence [15][19] Consumer Behavior and Economic Outlook - There is concern about the psychological impact of the shutdown on consumers, particularly those living paycheck to paycheck [18][28] - The economy is described as K-shaped, with higher-income consumers faring better than lower-income consumers, who are increasingly cautious about spending [25][28] - Upcoming earnings reports from retailers like Walmart and dollar stores are anticipated to provide insights into consumer behavior [27] AI Sector Developments - Concerns are rising in the AI sector following Coreweave's weak guidance and TSMC's slowing sales, which may indicate broader issues in the AI trade [10][34] - SoftBank's sale of its $5.8 billion stake in Nvidia is viewed as a potential warning sign, although some analysts believe it may not reflect overall demand destruction in the sector [10][34] - Despite challenges, there are still positive indicators in the AI space, with other companies like AMD and major hyperscalers increasing capital expenditures for data centers [37] Airline Industry Insights - Delta Airlines has shown resilience during the government shutdown, with shares up about 2% in the past month despite operational challenges [47] - Delta's third-quarter results indicated record revenue, but the airline industry is characterized by low margins and high operational costs, making it a challenging investment [50][51] - The government shutdown has led to flight cancellations, which could impact revenue and earnings for airlines as they work to restore operations [53][55]

Core Insights - The analysis highlights the importance of alternative data sources in understanding wage inflation trends post-COVID, indicating a shift in wage dynamics with a softening observed primarily at the high end of the wage spectrum [1][3][5] Wage Dynamics - The recovery has shown a K-shaped pattern, where the lower end of the wage spectrum remains weak while the high end has shown some strength recently, but this has now reverted to pre-COVID levels [2][3] - Aggregate wages are returning to pre-COVID levels, indicating a softening trend, particularly from the high end rather than the low end [3][5] Market Implications - The current labor market data suggests a slowdown, which aligns with other data sources and indicates a 70% probability of the Federal Reserve continuing its rate-cutting cycle [5][6] - The dependency of risk asset markets on potential rate cuts from the Federal Reserve is emphasized, with fixed income markets being more sensitive to rate changes compared to riskier assets like high yield [6][7][8] Valuation and Market Sentiment - Recent market movements reflect a pullback from previously euphoric valuations, particularly in the equity market, which had become overextended [11][12][13] - The current market environment presents a potential buying opportunity, contingent on the macroeconomic outlook remaining stable [13] Investment Strategy - The sweet spot for investment is identified in the middle part of the yield curve (five to seven years), where the Fed's normalization efforts provide some support [14][15] - Strong corporate earnings and balance sheets suggest limited downside risk, making carry trades appealing in the current environment [17][18]

Take a much closer look at the alternative data sources, the private data sources, the alternative data that I mentioning there. We've had a lot of success scraping the wage inflation data or the wage posting data and extracting from it wage inflation measures. And one of the most important stories that I think everyone is aware of it when you came out of Covid, it was the bottom and that led the wage gains and that shifted.And we've been in a period where, you know, you guys have talked about it, the K-sha ...