Adding Insult To Margin Calls, Nvidia Receives DOJ Subpoena Making Record Price Drop Even Worse.
$NVDA is down another 3% in the overnight session After the close, the DOJ sent subpoenas to Nvidia and other companies in an escalation of its investigation into possible antitrust law violations by Nvidia. DOJ is concerned with whether Nvidia penalizes buyers that don’t exclusively use Nvidia chips and makes it difficult to switch suppliers. Source: Markets & Mayhem
September is historically the worst month of the year for stocks:
The S&P 500 has fallen -2.3% on average in September over the last 10 years, marking the only month with negative returns. Since World War II, the average September return has been negative, at -0.8%. Moreover, the Volatility Index, $VIX, has seen an average spike of ~10% in September over the last 33 years. Subsequently, in October and November, the S&P 500 has seen a +1.6% and +3.8% rally on average. Markets are entering their most volatile period of the year. Source: The Motley Fool, The Kobeissi Letter
Another Japanese Yen market shock is coming warns T. Rowe Price 🚨
Source: Barchart
US manufacturing has officially contracted for the 5th consecutive month, to 47.2 points.
The ISM manufacturing PMI index missed expectations of 47.5 points for last month. New orders fell to 44.6 points from 47.4 in July, experiencing contraction for the 3rd straight month. Manufacturing activity has now shrunk in 21 of the last 22 months, extending the second-longest downturn in history. The worst part? The prices paid index jumped to 54.0 points from 52.9 in July, expanding for the 8th month in a row. Rising prices with falling output is rarely a good combo for stocks >>> to be monitored Source: www.zerohedge. The Kobeissi Letter
BREAKING: Magnificent 7 stocks have now erased $550 BILLION of market cap today.
Nvidia, $NVDA, is on track for its largest daily drop since April 2024. As discussed during our H2 outlook, volatility is coming back with a vengeance ahead ahead of US elections. Source: The Kobeissi Letter, Bloomberg
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Is it sustainable?
Interest Expense, Social Security, and Health are set to account for 87% of the US government spending growth over the next 10 years. Government spending is estimated to grow from $6.8 trillion in Fiscal Year 2024 to $10.3 trillion in 2034, according to the CBO. $3.0 trillion of the $3.5 trillion increase come from Social Security, federal health care programs, and interest costs on the public debt. Interest costs are projected to be the fastest growing part of the budget, DOUBLING from $892 billion in 2024 to $1.7 trillion by 2034. The net interest share of spending growth could hit as high as 23%. Source: The Kobeissi Letter, CBO
