MARKET WRAP

Today marked the third straight day of gains off Friday’s bounce, and a continuing cooling of implied volatility. The morning tried to deliver a little drama with SPX lower by about 0.5%—but buyers stepped in quickly and stocks grinded higher for most of the session. On the day: SPX +0.9%, QQQ +0.6% and IWM +2.1%.

Elsewhere, the US10YY has now round-tripped back to 4.00% while Dec rate cut odds remained above 80%. Gold continues a sneaky bounce, while oil pulled back, now back below $58. The VIX is now 18.56, down nearly 10 points from last week.

Notable Moves: The move higher today was still mostly broad based with just energy and utilities lower. Tech was somewhat mixed mainly as NVDA’s losses cancelled out some gains elsewhere.

After Hours: Dell is +1%, WDAY is -4%, ADSK is +5%, and ZS is -8% following after hours earnings reports.

Today’s MRKT Call: Dan and Guy break down whether the SPX’s latest bounce can stick, with Chris Verrone digging into breadth and the setup for a seasonal rally, and Michael Obucino weighing in on the VIX round-trip and what recent moves in retail names like WMT, TJX, and BBY are telling us. Plus a trade in INTC.

Today’s RiskReversal Pod: Guy and Liz break down the market setup heading into Thanksgiving—touching on the recent bounce, new Fed expectations, consumer data, sector trends, Bitcoin, oil, and the Packers Lions Thanksgiving game.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow rallies nearly 700 points on increased hope for a December rate cut (CNBC)

• Consumer confidence hits lowest point since April as job worries grow (CNBC)

• Market Volatility Underscores Epic Buildup of Global Risk (NYTimes)

• Nvidia says its GPUs are a ‘generation ahead’ of Google’s AI chips (CNBC)

• Google, the Sleeping Giant in Global AI Race, Now ‘Fully Awake’ (Bloomberg)

• OpenAI needs to raise at least $207bn by 2030 so it can continue to lose money, HSBC estimates (FT)

• Oracle-Linked Borrowing Binge Worries Lenders (The Information)

• Private Credit’s Sketchy Marks Get Warning Shot From Wall Street’s Top Cop (Bloomberg)

WHAT’S NEXT?

Implied volatility continued its collapse, and if the VIX moves lower from here it could create the conditions for a run back to the highs.

One of the more interesting dynamics right now is that the market is finally shaking off the idea that NVDA must go up for the broader tape to go up. The SPX is up almost +4% from Friday’s lows with zero help from NVDA, which is still about -16% off its recent highs and at one point this morning was nearly -20% off its highs.

Another recent development: small caps. IWM has bounced nearly +7% off last week’s lows, helped by December rate-cut odds now above 80% and the 10-year yield back at 4%. Small caps seem to love that mix after a brutal couple of weeks. As we wrote last week, during the worst of the chop, there were two things that could break the volatility: (1) rate-cut odds snapping back above 60%, and (2) a clean NVDA beat followed by a positive investor reaction.

We didn’t get the second one, but the first one blew past, and can be seen in that huge move in small caps. The rotation inside the Mag7+ from NVDA into GOOGL and AVGO has also been a curveball few saw coming.

For tomorrow, Deere before the open, Initial Jobless Claims in the morning, Fed Beige Book late in the day, and as a result of the collapse in implied vol, less than a 0.5% expected move in SPX.

Wednesday, November 26th

• Pre-market: DE 5%

• 8:30am - Durable Goods

• 8:30am - Initial Jobless Claims

• 9:45am - Chicago PMI

• 2pm - Fed Beige Book

SPX Expected move 0.5%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Let The Seasonal Rally Begin?!

Dan and Guy talk today’s action and whether the SPX’s recent bounce can hold. Chris Verrone of Strategas joins to talk the advance/decline readings on this bounce and how it’s setting up for a potential seasonal rally. Then Michael Obucino from Robinhood joins to talk the recent VIX spike and subsequent decline, retail names like WMT, TJX and BBY. Then, a live trade in INTC.

• Analysis - SPX, RSP, Russell 3k, SMH, BTC, WMT, TJX, BBY, INTC

• Live Robinhood Trade - INTC Put Calendar Spread

• Your Questions

  • Larry - What wine does Guy recommend for Thanksgiving

Learn more about our sponsor, Robinhood.

Watch RiskReversal Podcast’s newest episode: The Numbers Are Not What They Seem...

In this episode of the RiskReversal Podcast, Guy Adami and Liz Thomas from SoFi discuss various financial market trends leading into Thanksgiving week. They also touch on the Packers football game which will be played at 1 pm ET on Thursday. They talk about the recent rally in the S&P 500, attributing it to possible Fed rate cuts and positive job numbers. Liz highlights the Fed's stance on unemployment and its implications for future rate decisions. The conversation also covers the CPI, GDP data, consumer spending, and signs of economic stress like rising delinquency rates. They discuss sector-specific trends, focusing on healthcare and energy markets, and explore the potential impact of geopolitical events on big cap pharma stocks. Additionally, they touch upon the dynamics of the yen carry trade, the significance of Bitcoin movements, and oil prices' role in economic forecasts. The episode concludes with Thanksgiving well-wishes and reflections on their collaboration and friendship.

Learn more about our sponsor SoFi and RBC Capital Markets.

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