MARKET WRAP

Equities spent another session under modest pressure. The past two day’s action isn’t overly concerning yet, most likely just some buyer exhaustion. The Mag7s were mostly lower again today, but not as clear cut as yesterday. Some of this week’s tone may reflect the loss of Treasury yields as an equity tailwind, with the 10YY back up to 4.15%. On the day: SPX -0.3%, QQQ -0.3%, and IWM -0.9%.

Elsewhere, as mentioned, the US10YY is now 4.15%. DXY was higher again, now $97.86, while Gold was lower. Oil has been steadily ticking higher the past few days, now just shy of $65. The VIX was lower today, even with stocks lower, perhaps compressing a bit from what looked like a possible small cap breakout days ago.

Notable Gainers: BABA +8.2%, MRVL +7.5%, INTC +6.7%, TSLA +4.2%, LULU +3.5%, XEL +6.7%

Notable Losers: FCX -16%, KKR -6.2%, APO -5%, BX -3.8%, JBL-3.8%, EA -3.7%

• MRKT Call: Carter joins Dan to talk where we are in the rally, what’s ahead for small caps, and whether anything can halt gold’s climb. They also cover energy, Bitcoin, software stocks, and take on your questions!

• RiskReversal Pod: Dan and Peter Boockvar speak with Louis-Vincent Gave, CEO of Gavekal, about China’s response to U.S. tech restrictions and the broader U.S.-China tech rivalry. The discussion spans China’s industrial rise, Taiwan’s role, China’s ties with Russia and India, and the challenges U.S. companies face competing in the Chinese market.

MRKT MATRIX: TODAY’S TOP STORIES

• Stocks dip for a second day as investors continue selling AI plays Nvidia and Oracle (CNBC)

• New home sales soar 20% in August to a three-year high (CNBC)

• In OpenAI Megadeal, Nvidia Discusses a New Business Model: Chip Leasing (The Information)

• Intel Is Seeking an Investment From Apple as Part of Its Comeback Bid (Bloomberg)

• Oracle to Raise $18 Billion in Second Biggest Bond Sale of Year (Bloomberg)

• Oracle’s AI-Fueled Cash Crunch Sets Stage for Major Job Cuts (Bloomberg)

• Alibaba shares jump 9% after CEO unveils plans to boost AI spending (CNBC)

• Day trading is about to get easier for smaller retail investors (CNBC)

• Get Rich or Get Wiped Out: Bitcoin’s Hottest New Trade(WSJ)

WHAT’S NEXT?

That sub 4% US10YY print immediately following last week’s FOMC looks like a near-term low, and now lacking that tailwind, traders seem hesitant the past two days to rip stocks, particularly rate-sensitive names, to new highs.

We have GDP tomorrow and PCE on Friday. So far, the market isn’t showing much concern around either release, with only a modest bump in Friday vol. There has been a bit of an uptick in 30-day vol over the past week, perhaps as it captures the September jobs report (Oct 3), but it will soon also encompass the October Fed decision. Further out, we see a pretty typical vol curve with a gradual climb toward 15, still historically low. That implies about a 6.5% SPX move in either direction into year end.

From a positioning perspective: with implied vols low but potentially beginning to creep higher, option buyers are not really exposed to significant IV declines. In fact, no matter if the next decisive move is a breakout or a breakdown, it likely comes with rising vol, making the current environment pretty favorable for directional options strategies into year end.

For tomorrow, GDP, and initial jobless claims before the open, with Costco earnings after the close, plus a lot of Fed Speak:

• Thursday, Sept 25th (consensus)

  • Fed Speak: Goolsbee, Schmid, Williams, Bowman, Barr, Logan, Daly

  • Pre-market: ACN 7%, KMX 7%

  • 8:30am -GDP (3.3)

  • 8:30am - Initial Jobless Claims (235k)

  • 8:30am - Durable Goods (-0.5%)

  • 10am - Existing Home Sales (3.96m)

  • After-hours: COST 3.3%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Chart Check: S&P 500, Gold & Bitcoin with Carter Worth

Carter joins Dan to break down the rally and the current uptrend channel, what’s ahead for small caps, and whether anything can halt gold’s climb. They also cover energy, Bitcoin, software stocks, and take on your questions!

• Analysis - SP e-minis, RUT, IWM, Gold, GDX, OIH, XLF, BTC, ORCL, ADBE, CRM, NOW, CRAK, WU, BA, TSLA

• Your Questions:

  • Situation Room - Carter, where are you on bitcoin?

  • Wavy McFly - Carter, CRAK looks like a big breakout, what do you see?

  • J Luther - Curious what Carter would say is a good dividend stock with upside potential for the next year

  • Fernando Ortegon - Can we ask Carter about Boeing and upcoming orders?

Learn more about our sponsor, CME Group.

Watch RiskReversal Podcast’s latest episode: China vs. US Tech: The True Story Nobody’s Telling

Dan Nathan and Peter Boockvar host Louis-Vincent Gave, founder and CEO of ⁠Gavekal⁠, to discuss the evolving dynamics of China trade. The conversation explores China's response to U.S. restrictions on technology, particularly semiconductors, and the broader implications of the growing U.S.-China tech competition. Louis offers insights into China's rapid industrial advancements, the strategic importance of Taiwan, and the future of U.S.-China relations. The discussion also touches on the global impact of China's economic integration with Russia and India, and the challenges faced by American companies in maintaining competitiveness in the Chinese market.

Learn more about our sponsor Betterment, Current, and RBC Capital Markets.

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