MARKET WRAP

Equities started Fed week strong, with the Nasdaq once again leading the way. Small caps also posted gains, while the SPX closed above the 6600 mark for another new high. Industrials lagged the others a bit but finished green as well. On the day: SPX +0.5%, QQQ +0.8% and IWM +0.4%.

Elsewhere, the US10YY was down slightly to 4.04%, Gold keeps going, up +1%. Oil was higher by +1% as well. Notably the VIX jumped a bit, now 15.70. More on that below.

Notable Gainers: STX +7.3%, GOOGL +3.5%, MGM +3.5%, TSLA +3.5%, INTC +3.2%, GS +1%

Notable Losers: ISRG -3.2%, TXN -2.6%, AZN -1.9%, DHI -3.6%, MCD -1%

After hours: All of the indices closed the last few minutes strong and SPY and QQQ are down a tick after hours. PLAY is lower by about -13% on earnings.

• MRKT Call: Guy and Carter on the relentless rally, falling yields into the Fed, small caps, Tesla, gold’s momentum, NVDA’s pause, and take on your questions.

• RiskReversal Pod: Dan and Danny Moses talk with CME Group CEO Terry Duffy about retail trading growth, new CME products, risk management, market structure, and the broader impacts of debt, technology, and global stability.

MRKT MATRIX: TODAY’S TOP STORIES

•  S&P 500 rises after Trump’s positive comments on China trade talks, gain in Tesla (CNBC)

• Wall Street’s ‘Run It Hot’ Trade Powers Stock Records (WSJ)

• Gold Hasn’t Rallied This Much Since 1979 (WSJ)

• Alphabet becomes fourth company to reach $3 trillion market cap (CNBC)

• The Market’s Riskier Than It Used to Be—and Investors Love It (WSJ)

• Sierra CEO Bret Taylor on why the AI bubble feels like the dotcom boom (The Verge)

• Tesla shares gain as Elon Musk reveals rare $1 billion stock buy in sign of confidence in EV maker (CNBC)

• CoreWeave’s stock rallies on disclosure of $6.3 billion order from Nvidia (CNBC)

• Wall Street Raises Alarm on Trump Push to End Quarterly Earnings(Bloomberg)

WHAT’S NEXT?

More of the same today with one wrinkle: implied volatility ticked higher even as stocks rallied. Some of that is routine—vol coming off near year-to-date lows after the weekend, plus positioning ahead of the FOMC—but it’s worth watching if this becomes a trend. From this weekend’s email:

One last point: with the SPX finally breaking above 6500, we’re starting to see early signs of potential euphoria in names beyond the Mag7. If IWM breaks out above prior highs that could add even more fuel to the fire. In that scenario, we may see rising volatility alongside rising equities, as retail traders chase upside calls and spark gamma squeezes higher.

When stocks and volatility rise together, it can signal the beginnings of a more euphoric phase, especially when it’s expanding from mega-caps into small caps. That type of action often points to retail traders reaching for speculative upside not only in the equities but also via upside call options, which in turn can fuel sharp, short gamma-driven rips higher. Those conditions can become an accelerant for the entire market. While that setup is usually indicative of getting towards the end of a broader rally, it doesn’t flash an immediate bearish sign. It does mean the market probably gets more volatile from here, with bouts of downside alongside upside surges across names even remotely connected to a potential AI bubble amidst a Fed rate cut cycle.

• Tuesday, Sept 16th

  • Pre-market: GIS 4.5%

  • 8:30am - Retail Sales (0.3%)

  • After-hours: CBRL 8%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Stocks Hit New Highs Ahead of FOMC Meeting

Guy and Carter break down the relentless market, falling yields, and whether small caps are setting up for a triple top or a breakout. They also cover Tesla’s move with Elon buying stock, gold’s momentum, NVDA’s pause, and take on your questions.

• Analysis - US10YY, TLT, SPX, SPY, IWM, KWEB, GOOGL, TSLA, GDX, GLD, ORCL, MSFT, DHI, AVGO, PLTR, KVUE 

• Your Questions

  • Chris L - CAT, near term triple top?

  • Ramesh B - Media Can CBW opine on DHI?

  • Timmy - Talk AVGO

  • Chance Arcos - What’s up with PLTR

  • Jack CF - Any thoughts on KVUE

Learn more about our sponsor, MoneyLion.

Watch RiskReversal Podcast’s newest episode: Hope Is Not A Strategy with Terry Duffy, CEO of CME Group

Dan Nathan and Danny Moses welcome Terry Duffy, Chairman and CEO of ⁠CME Group⁠, to discuss their partnership and market evolution. They talk about the growth in retail trading, the impact of technological advancements, and CME's new products like futures, event contracts, and binary contracts designed for retail investors. The discussion also covers the significance of risk management tools such as stop-losses, the recent rise in open positions in equity and interest rates at CME, and the broader implications of high national debt and technology disruption on the markets. They delve into the importance of timing in listing products, using Bitcoin's listing in 2017 as an example, and touch on the interconnectedness of global financial stability and market structure.

Learn more about our sponsor CME Group, iConnections, and SoFi.

A MESSAGE FROM OUR PARTNER

Subscribe to the RiskReversal YouTube Channel and drop a comment/like to show your support

Want to check out past podcast episodes? Go to wherever you get your podcasts and type in “RiskReversal Media”

We want to hear your feedback! Reply to this email with any comments or questions