PROSPERITY PUB MARKET TALK
The Crash That Wasn’t… (yet?)
For about a week, it felt like markets had stalled out…
Most major indexes had peaked on February 12th and kind of listlessly went down, then up in a range…
Some folks were calling it a top. Others were more cautious, calling it a breather or a slight retracement.
Either way, it felt like markets were waiting on something.
But as CPI and PPI reports came and went without much hoopla… (ok, CPI did rattle us a bit)
It then became glaringly obvious… the market was waiting on NVDA earnings.
The only question was: which way would it go?
A bad report from NVDA could send markets crashing down…
Thankfully — at least for now — we don’t have to see what that looks like.
Because almost as soon as NVDA reported earnings after yesterday’s close, it — and the major indexes — picked a direction. And it was decidedly up.
But still something doesn’t feel quite right… because the rally isn’t as broad as you might think.
And despite the sighs of relief from many traders, there still could be another shoe ready to drop.
Could it be the Fed’s planned shutdown of its emergency bank lending program in a couple of weeks?
Or maybe the commercial real estate market’s troubles finally catch up with it?
And that’s to say nothing of the fact that the indexes going up are masking the fact that fewer and fewer stocks are participating in the rally.
In other words, it’s fewer and fewer stocks making higher and higher gains… while everything else waffles or sinks.
We don’t have a crystal ball, but that doesn’t sound like a healthy market… and until things clear up, caution should be the name of the game.
— The Prosperity Pub Team
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