WEEKLY SUMMARY: Crypto carnage, tech wrecked, momentum massacred
Despite some good news during the week from both corporate earnings reports and government economic data, U.S. equity markets finished the week lower. The sell-off appeared to be driven by worries about lofty stock valuations and concerns around whether AI will generate enough profits to justify the massive spending that companies have poured into supporting the developing technology. The Nasdaq Composite had the largest losses, while the Russell 2000 held up better but still lost ground. The S&P 500 Index finished about 4.4% lower than the record high it achieved in late October. A rebound on Friday helped ease the losses that the major benchmarks suffered earlier in the week. Chipmaker NVIDIA reported record revenue on Wednesday evening that exceeded analysts’ expectations, driven by strong demand for its AI chips. The company also provided a healthy revenue forecast for Q4 that surpassed consensus estimates. The market initially reacted favorably to the news when trading opened on Thursday, but sentiment turned negative later in the morning, and NVIDIA finished 3% lower for the day and pulled the major benchmarks down with it. U.S. Treasuries yields trended down over the week. The pan-European STOXX Europe 600 Index ended 2.21% lower amid renewed worries about inflated AI stock valuations. The Nikkei 225 Index fell 3.48%. Crude oil fell to a 1-month know. But t was crypto that suffered the most, with bitcoin testing down to almost $80k intraday on Friday.
Have a great weekend
Charles & Syz Research Lab
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U.S. stock indexes finished the holiday-shortened week higher, boosted by dovish comments from some Fed officials and several weaker-than-expected economic reports that seemed to reinforce the idea that a December rate cut remains on track. Small-cap stocks outperformed their large-cap peers, as the Russell 2000 Index advanced 5.5%. The Nasdaq Composite also posted strong returns, rebounding from the prior week’s sell-off as concerns regarding elevated valuations and spending on AI appeared to take a back seat to optimism around the growth potential from the technology. In economic news, U.S. retail sales increased by 0.2% in September (below +0.4% estimates). September PPI rose 0.3% in September, in line with estimates.


