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New Highs as Small Caps Rip, MegaCaps Mixed. PPI Tomorrow.
RiskReversal Recap: Wednesday, August 13th
RiskReversal Media
August 13, 2025
MARKET WRAP
Stocks added to yesterday’s breakout ahead of tomorrow’s PPI and initial jobless claims. The SPX did finish off its highs with some megacaps in the red. On the other hand, small caps are loving the talk of lower rates. The Russell is up +5% in the past two days and nearly +10% since the beginning of the month. On the day: SPX +0.3%, QQQ flat, and IWM +2.0%
Elsewhere, yields were lower across the board with the US10YY now 4.24%. Oil was slightly lower (again). Gold bounced a tiny bit. DXY is back below $98.
Notable Gainers: PSKY +38%, AMD +5%, BIIB +5%, PYPL +4%, NKE +3.7%
Notable Losers: WMT -2.5%, NVDA -1.3%, MSFT -1.7%, MU -3%, AVGO -2%, ORCL -4.2%
After hours: CSCO is lower by about -2.5% following earnings.
MRKT Call: Guy and Dan on the market at highs and if there are any signs of exhaustion in story stocks, including CRCL’s secondary offering, and CRWV earnings gap lower. Plus, a look at brokerage/ exchange stocks, bitcoin, ethereum and more
RiskReversal Pod: Peter Boockvar joins Dan to talk the CPI, the now likely September rate cut and what Powell does after. Also, discussion on this week’s rally in rate sensitive sectors, the potential for stagflation into year end and attempts to juice the market from DC.
MRKT MATRIX: TODAY’S TOP STORIES
Dow rises 300 points, S&P 500 hits new record in second day of gains (CNBC)
Trump considering 11 candidates for Fed chair, including David Zervos and Rick Rieder, sources say (CNBC)
Bessent Urges Fed to Lower Rates by 150 Basis Points or More (Bloomberg)
Investors Playing More Defense Even as Stocks Climb to New Highs (Bloomberg)
Goldman stands by call that consumers will bear the brunt of tariffs after Trump blasts bank’s economist (CNBC)
Global Oil Markets Face Record Supply Glut Next Year, IEA Says (Bloomberg)
Companies Are Pouring Billions Into A.I. It Has Yet to Pay Off. (NYTimes)
OpenAI’s Rocky GPT-5 Rollout Shows Struggle to Remain Undisputed AI Leader (WSJ)
China’s Lead in Open-Source AI Jolts Washington and Silicon Valley (WSJ)
Why China Loves and Fears Nvidia’s H20 Chip (WSJ)
WHAT’S NEXT?
The breakout of the past two days has been fueled by the assumption of a September rate cut, and while tomorrow’s PPI likely won’t shift those odds (almost a foregone conclusion) it could stir concerns that the Fed is easing into an unpredictable inflation backdrop. That, paired with recent signs of slowing job growth, would revive the “rock and a hard place” narrative for the Fed. On the flip side, if PPI comes in as expected or cooler, it likely adds more fuel for the rally to continue its grind higher.
The jobs picture also gets some focus in the morning, with initial jobless claims hitting at the same time as PPI. For now, volatility expectations continue to compress—the SPX’s implied move for tomorrow is just 0.4%, nearly half the size of the expected move into Tuesday’s CPI. In other words, traders aren’t anticipating fireworks, which raises the possibility that even a modest surprise in PPI or claims could catch the market leaning the wrong way. Though, the options market’s expectations for low vol tend to be right more often than wrong.
On the earnings front, JD.com, Deere, and Advance Auto Parts report before the open, with Applied Materials set to release after the close.
Thursday, August 14th
Pre-market: JD 5.5%, DE 4.8%, AAP 11%
8:30am - PPI (0.2%, 2.5%)
8:30am - Initial Jobless Claims (228K)
After-hours: AMAT 5%
TODAY’S EPISODES
Watch MRKT Call’s newest episode: The Market Can’t Stop, Won’t Stop
Discussion of the market at highs and if there are any signs of exhaustion in story stocks, including CRCL’s secondary offering, and CRWV earnings gap lower. Plus, brokerage and exchange stocks, bitcoin, ethereum and more
Analysis - S&P e-minis, Nas100 e-mini, CRCL, CRWV, IBKR, HOOD, CME, Fed Funds Rate vs 10YY, Dollar, Gold, BTC, ETH,
Your Questions:
Eric C - $HOOD 100% above 200day
Carter Evans - Do you think there will be a M&A Wave in the Enterprise Software Industry? ADBE, DOCU, etc?
Gary Webb - Chinese equities showing signs of life. Thoughts?
Learn more about our sponsor, CME Group.
Watch RiskReversal Podcast’s newest episode: The Fed’s Hand is Forced
Dan welcomes Peter Boockvar, CIO at OnePoint BFG Wealth Partners and The Boock Report, to discuss market reactions to the latest CPI reading, speculations about Fed rate cuts, and the impact of tariffs on inflation and economic growth. They delve into the persistent inflation rate of 3% and discuss factors that could re-accelerate economic growth (currently 1%) despite ongoing trade wars. They also explore the implications of sustained AI capital spending and the role of central bank policies in juicing the economy amid tariff pressures. The conversation highlights the stock market's insatiable appetite for risk and potential future economic scenarios.
Timecodes 0:00 - Cooler Runnings 5:55 - Rate Sensitive Names 7:40 - Stagflation Risks 11:45 - Market Juicing
Learn more about our sponsor Betterment, Current, and RBC Capital Markets.
