MARKET WRAP

A little reminder today that we are by no means out of the woods on tariff news and a one two punch of NVDA tariff effects and Chair Powell comments on inflation and slowing growth gave traders a reason to sell. On the day: SPX -2.3%, QQQ -3.0% and IWM -1.0%. Elsewhere, the 10Y yield was down again, now 4.29%. The dollar declined and gold is going somewhat parabolic to new highs, up 3.4%. Oil gained 2.2%.

• RiskReversal Pod: Josh Wolfe, founder of Lux Capital joins Dan to talk the current state of venture capital, macroeconomic forces, and the impact of rising interest rates on private and public markets.

• MRKT Call: Discussions on the NVDA news and who else could be in the crosshairs. Some thoughts on slowing advertising numbers, what a Tik Tok deal would mean for META. How important is the weakness in the dollar, and more.

MRKT MATRIX: April 16, 2025

Today’s Top Stories:

• Nasdaq drops 3% as tech sell-off accelerates (CNBC)

• Global Tech Stocks Drop as ASML Warning Adds to Nvidia Curbs (Bloomberg)

• Powell indicates tariffs could pose a challenge for the Fed between controlling inflation and boosting growth (CNBC)

• Bank of Canada Sees Year-Long Recession in All-Out Trade War (Bloomberg)

• Treasury Secretary Scott Bessent to Yahoo Finance: Not all tariff deals will be done in 90 days (Yahoo Finance)

• China Open to Talks If US Shows Respect, Names Point Person (Bloomberg)

• Top Forecasters Warn Housing Market’s Days of Big Gains Are Over For Now (Bloomberg)

• U.S. vehicle supply is falling amid tariff fear-buying (CNBC)

• Trump’s tariffs on Chinese parts for Cybercab, Semi disrupt Tesla’s US production plans, source says (Reuters)

• Lyft to buy taxi app Free Now for $200 million to expand into Europe (CNBC)

• OpenAI in talks to pay about $3 billion to acquire AI coding startup Windsurf (CNBC)

Today’s MRKT Call is Presented by CME Group

Nvidia Drags Down Tech Stocks

Discussions on the NVDA news and who else could be in the crosshairs of the escalation between the US and China. Some thoughts on slowing advertising numbers, what a Tik Tok deal would mean for META and more. How important is the weakness in the dollar? A Netflix earnings preview.

• John Butters Report: Mag 7 Earnings Growth vs the other 493 in S&P 500

• Call of the Day: Why does BTC trade like Mag 7 and not Gold?

• Analysis: NVDA, MSFT, AAPL, AMD, SOXX, SPX, META, DXY, Gold, NFLX

• Your Questions: 

  • I just bought puts on GDX, way overbought?

  • Thoughts on AXP earnings?
    
    

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Today’s RiskReversal Podcast is Presented by Betterment and iConnections

Josh Wolfe on Venture Capital, AI Bubbles, and the Macro Forces Shaping Markets

In this episode of "RiskReversal Pod," Dan Nathan sits down with Josh Wolfe, founder and managing director at Lux Capital. The discussion delves into the current state of venture capital, macroeconomic forces, and the impact of rising interest rates on private and public markets. Wolfe shares insights on the generative AI landscape, the dynamics between large tech companies and startups, and the valuation discrepancies between private and public markets. The conversation also explores the psychology of investing, the importance of proprietary data in the AI era, and the evolving role of leadership and narrative in business and politics. The episode blends market analysis, personal anecdotes, and broader reflections on human nature and decision-making in finance and technology

Timecodes:

• 0:00 - Intro

• 1:45 - Rising rates, rising cost of capital

• 6:50 - The lag in venture

• 10:30 - Palantir

• 15:30 - Tesla/Elon Musk

• 19:30 - The most important advice for young people

• 22:30 - Mentorship

• 27:00 - Innovation around mega-cap tech // Shorting Nvidia Story

• 35:00 - Google, search, and AI models

• 44:00 - Tariffs

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What’s Next?

Although nothing like last week, today’s volatility broke a period of relative calm over the past several days and may be the lead-in to even more ahead. There were two primary stories today that had the sellers back in control:

• Nvidia Sees an Immediate Tariff Impact: Last night Nvidia announced that new U.S. export restrictions on its H20 AI chips to China could reduce its first-quarter earnings by $5.5 billion. That had the stock down sharply after hours and it carried through to today’s trading with the stock finishing down about 7% (although a few dollars higher than ints intraday lows)

• Powell, Inflation and Growth: Later in the day, Fed Chair Powell reiterated the likely result of tariffs. He indicated that the Fed would maintain its current interest rate stance until more clarity is achieved, highlighting the challenges of addressing both inflation and slowing growth simultaneously. (Another ‘Whaddya Want From Me?’ speech)

That was enough to have a decent sized drop from what had been a relatively calm few days near resistance. The VIX was up a few points and remains elevated, something that will likely remain the norm for now. But, as we’ve mentioned the past few days, rallies that meet resistance provide moments where some rethinking of positioning are possible, with the potential to either lay off some premium in the form of upside call spreads, or even reinitiate protection after a severe collapse in implied volatility from panic levels. We’ll continue to highlight those moments.

Looking ahead, tomorrow is monthly options expiration and there’s a possibility that could dampen intraday volatility, but the combination of today’s VIX expiry and tomorrow’s monthly equity expiry may open the market up for some larger moves next week and beyond.

For tomorrow, expected moves:

• SPX: 1.6%

• QQQ 1.9%

• NFLX: 7% (reports after hours)
  
  

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