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“I really try to put myself in uncomfortable situations. Complacency is my enemy.” – Trent Reznor
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Well, we made it through Nvidia (NVDA). The hype surrounding last night’s earnings report was as high as we can remember for any stock reporting earnings in the past and reminiscent of Cisco (CSCO), Intel (INTC), or Microsoft (MSFT) reports in the late 1990s, or Apple (AAPL) reports in more recent years. NVDA’s report wasn’t great, but it wasn’t bad either. The company managed to report better-than-expected EPS and sales, while slightly raising sales guidance. That was good enough for investors who had set the bar low in recent weeks. The stock is currently trading just about 2.5% higher in the pre-market, and Nasdaq and S&P 500 futures are riding its coattails trading higher by more than 0.5%.
Bulls will take it, but as the last few days have shown us, we’re in a market environment where what the market is doing right now is hardly indicative, no less a guarantee of where we’ll be an hour from now let alone the end of the day. Add to that a ton of economic data and several Fed speakers on the calendar, and it’s sure to be an eventful day!
What happened to sentiment? Everywhere you look, fear has set into the collective mood. Indices that measure economic uncertainty have shot up to record highs, even taking out their prior extremes from the early days of Covid. The latest measures of consumer sentiment from the University of Michigan and the Conference Board both also showed much larger than expected declines in their latest readings. But nowhere has the negative turn in sentiment been more pronounced than in the equity market.
The CNN Fear & Greed Index gauges stock market behavior by looking at momentum, breath, options activity, strength in the junk bond market, and demand for safe havens. As of this morning, the index was at 21, putting it in the “Extreme Fear” range.
Over the last year, the current level of the CNN Fear & Green Index is among the lowest. The only time it was lower was in early August when markets briefly sold off as the Japanese equity market crashed over 10% in a single day.
