March 9, 2025
What You Need to Know Today:
Nvidia to get pop from CES and Huang keynote
Last year, Nvidia’s stock experienced a 16% increase over the 10 days following the beginning of the huge Consumer Electronics Show in Las Vegas. This year Nvidia (NVDA) CEO Jensen Huang is scheduled to deliver the opening keynote speech at 6:30 p.m. Las Vegas time. (That’s 9:30 New York time.) I’d expect a couple of volatile days for Nvidia shares following Huang’s talk.
Wait! No soft landing! No more rate cuts! The market freaks out again!
It’s back! Fear that the economy is so strong that the Federal Reserve won’t cut interest rates as sharply or as quickly as expected. In the last few days, following on a surprisingly strong September jobs report, the market has gone from giving 50/50 odds to a second large 50 basis point interest rate cut at its November 7 meeting to pricing in doubts that the central bank will deliver even a 25 basis point cut.
Saturday Night Quarterback says (on a Sunday), For the week, ahead expect…
I expect a transition from a market dominated by speculation about the pace of interest rate cuts by the Federal Reserve to worries about earnings and the growth rate for corporate profits.
Albemarle, lithium stocks jump on buy-out speculation
Shares of lithium market leader Albemarle (ALB) rose 8.25% on Friday to close at $102.O9 on speculation in Australia that mining giant Rio Tinto (RIO) will pursue a major lithium deal with Albemarle cited as a possible target. Shares of Arcadium Lithium (ALTM), Lithium Americas (LAC) and Sociedad Quimica y Minera (SQM) also jumped, +10%, +7.1% and +3.1%, respectively. The speculation makes sense to me.
Strong September jobs report lowers expectations for 50 basis point cut from the Fed
Odds on a 50 basis point cut from the Federal Reserve at its November 7 meeting plunged to 0% today on the CME FedWatch tool after a strong jobs report for September showed a tick down in the unemployment rate.
September jobs report good news for the economy
The U.S. economy added 254,000 jobs in September, the most in six months. The unemployment rate fell to 4.1% and hourly earnings increased 4% from a year earlier, according to Bureau of Labor Statistics. Strong data is reassuring investors worried that the Federal Reserve had moved too slowly to cut interest rates and that the economy was headed toward a slump.
Step #8 in my Special Report: Sell DE, CAT and BHP tomorrow
Today I posted Step #8 in my Special Report: 8 Steps to Protect Your Portfolio from the Global Debt Bomb. I recommended selling Deere (DE), Caterpillar (CAT), and BHP Group (BHP) out of portfolios ahead of rising yields i the bond market. (In the case of Deere, I said I would keep my position in my long-term portfolio but sell the position in my 12-18 month portfolio.) Here’s what I posted in my Special Report
Live Market Report (20 minute delay)
Please Watch My New YouTube Video: COVID Is Hitting China Again
This week’s Trend of the Week video is COVID is Hitting China Again. China is seeing another wave of COVID. We can expect this wave to peak at the end of June with around 65 million cases a week. While that’s a huge number, the previous wave saw 35 million cases a day. So, yes, this is a smaller wave, but it certainly won’t help China’s economy, which is struggling to get back to a 5% growth rate. The country is also dealing with a youth unemployment crisis where the recent graduate unemployment rate is around 25%. This wave of COVID isn’t likely to shut down the entire country–if only because China’s leadership isn’t about to go back to the prior policy of widespread closures of factories and entire neighborhoods–but it is likely that some people will be less inclined go out, mandate or not, and they may self-impose their own lockdown until the wave subsides. This is all likely to take a bite out of the growth rate which was edging back toward 5%. As stocks stagnate and a recovery rally in China looks to be coming to an early end, I’ll be posting about shorting China ETFs on my paid site, JubakAM.com.
Special Report: Finding the Next Nvidia–my 10 Picks. Pick #1 Luminar
Pick #1 for my Special Report Finding the Next Nvidia: Luminar Technologies (LAZR). Could Luminar be the next Nvidia? Yes, if the Lidar market develops in the right way. Certainly, so far, the company is doing everything internal right.
Now can Biden and McCarthy (especially McCarthy) get their debt ceiling deal through Congress-here’s the next test
President Joe Biden and House Speaker Kevin McCarthy agreed on a deal that would raise the debt ceiling and avert a default by the U.S. government. If they can get it through Congress where a core of ultra-conservative Republican House members is very unhappy that McCarthy didn’t extract more concessions from the White House. The first test for the deal is the House Rules Committee.
Saturday Night Quarterback says, For the week ahead expect…
You’re entitled to feel a bit (or more) of debt ceiling fatigue. For a change of pace, look to Friday, June 2, when the Bureau of Labor Statistics releases its jobs report for May. Economists project that the U.S. economy added fewer than 200,000 jobs in May. That would be a big dip from the average monthly gain of about 370,000 over the last year. Average hourly earnings are forecast to have increased by 0.3% in May from April.
Even with a debt ceiling deal emerging from talks, the roller coaster ride isn’t over–here’s my timetable for the last bit of the ride
If negotiators reach a deal on resolving the debt ceiling crisis that only begins a process fraught with nailing-biting delays built into the legislative process. And opposition to the deal from progressive Democrats and ultra-conservative Republicans. Today, the stock market finished strongly higher on hopes that a deal that avoids a U.S. debt default is within reach. And on continued hyper-enthusiasm about anything vaguely touched by artificial intelligence. Next week, isn’t likely to show a smooth continuation of the upward trend. I’d expect headlines about disappointment with the deal and on the possibility that there aren’t enough centrist Democratic and Republican votes to pass the deal. I expect the deal to pass, eventually, but that doesn’t mean the market won’t chew its fingernails with worry on any particular day.
PCE inflation in April above expectations; interest rate increase for June 14 rise
The personal consumption expenditures price index, the Fed’s preferred inflation gauge, rose a faster-than-expected 0.4% in April, the Commerce Department reported this morning, May 26. Core PCE inflation also rose by 0.4% in April. “This is the wrong direction for the Fed,” Diane Swonk, chief economist at KPMG, told Bloomberg. “June will depend on getting outside of debt ceiling issues but a July hike is now in play.”
Today, a glimmer of hope for a debt ceiling deal
They’re still talking. Which is good. It looks like there might be a deal. Which is good. It would be based on kicking all the tough line item decisions on what programs to cut down the road to the August and September budget and appropriations process in Congress.
Deja Vue all over again–Fitch Ratings puts U.S. debt on “rating watch negative”
In 2011 in an earlier debt ceiling battle, S&P Global Ratings downgraded the U.S. credit rating from AAA on the risk that the United States would default on its debt. Yesterday, May 24, Fitch Ratings moved the United States to “rating watch negative” on the risk that Congress would fail to act in time to prevent a U.S. default on the country’s government debt.
Here are today’s 3 most important financial market numbers to figure out where we’re headed in the short term
Three numbers caught my eye today as indications of where the financial markets are headed in the short term. I’m looking at the moves in the Russell 2000 small-cap index. In the CBOE S&P 500 Volatility Index ( VIX). And in the odds on interest rate increases from the Federal Reserve on the CME FedWatch tool.
If the tech economy is slowing, somebody forgot to tell Nvidia–stock surges 20% in after-hours on earnings, revenue, guidance beats
Nvidia (NVDA) shares were up 19.68% at 4:45 p.m. New York time today, May 24, after the company reported beating analyst estimates on earnings and revenue. The company also told analysts to expect second-quarter revenue way, way above pre-announcement projections. For the three-month period ending April 30, Nvidia earned $1.09 per share, excluding one-time items, as revenue came in at $7.19 billion. Analysts were looking for the company to report earnings of 92 cents a share and $6.28 billion in revenue.
The debt ceiling crisis gets a new player: the Federal Reserve (maybe)
Minutes from the Federal Reserve’s May 3 meeting show that some Fed officials want the central bank to be ready to step in if inaction in Washington produces a big drop in the financial markets. Chair Jerome Powell has in public repeatedly said that “no one should assume that the Fed can protect the economy” if the Treasury can’t make good on all federal obligations. But that doesn’t mean, the minutes suggest, that the Fed will do nothing.
So how much damage is this debt ceiling fracas going to do to the economy? A deal could still cost the economy 570,000 jobs
We all know that a continued standoff on the debt ceiling would be bad for the U.S. economy and financial markets. But even a deal along current lines is going to cost jobs–lots of jobs–and take a bite out of economic growth, according to Bloomberg Economics Spending cuts expected in an eventual deal to raise the U.S. debt limit could cost the country as many as 570,000 jobs and make the recession projected by Bloomberg Economics even worse.
Everybody is busy drawing red lines in the debt ceiling talks–and they keep moving
This reporting from the Washington Post this morning makes me very pessimistic about any debt ceiling deal until after the first checks DON’T go out on June 1 or whenever. “During a closed meeting Tuesday morning at a GOP hangout a block from the U.S. Capitol,” the Post reported “House Speaker Kevin McCarthy (R-Calif.) made a pointed plea: Do not break ranks over the debt ceiling crisis. Ahead of another round of negotiations with the White House, McCarthy told Republicans they had the upper hand in the discussions and encouraged his members to show their support for colleagues facing tough reelection bids next year as a sign of unity, according to two people in attendance, who spoke on the condition of anonymity to describe the private talk. McCarthy urged members to make sure vulnerable lawmakers would have plenty of campaign money from GOP coffers — even pledging that they would not be outraised by their opponents in the 2024 election cycle.”
So why isn’t the market down more? The answer also sketches in where the risk lies at this moment
Today, May 23, finally saw some fear in stock prices. The Standard & Poor’s 500 closed down 1.03% on the day. The Dow Jones Industrial Average ended down 0.59%. The NASDAQ Composite was down 1.17% and the NASDAQ 100 dropped 1.21%. The small-cap Russell 2000 was off just 0.21%. That’s a remarkably small drop considering the S&P 500 was up 9.97% for 2023 as of the close yesterday. And the NASDAQ Composite was ahead 22.01% for the year as of the May 22 close. Looking at this market, what cries out for explanation isn’t why stocks slide today but why they have remained so strong in the signs of a slowing economy and a continued debt ceiling crisis that could, potentially, result in a default by the United States.
Retail stocks take another hit today on BJ warning
More woe for the retail sector this morning BJ’s Wholesale (BJ) reported first-quarter results before the market open that missed expectations for same-store sales growth (with earnings per share matching estimates.) The big killer, though, was guidance from the company that said second-quarter comparable store sales are tracking below the 5.7% increase in the first quarter. That 5.7% growth in first-quarter comparable store sales was below the 5.9% that Wall Street analysts had expected. The stock closed today down 7.26% on the day.
Special Report: Finding the Next Nvidia–my 10 Picks. Part 1, the Parameters for My Search, and Pick #1 Luminar
Certainly, we can all understand the attraction. Back on May 14, 2013, shares of Nvidia (NVDA) closed at a split-adjusted $3.60 a share. On May 1, they closed at $289.53. That’s a gain of 7943% in 10 years. Can we find the next Nvidia? 20/20 foresight would help, of course. But we can learn something about how to find the next Nvidia by examining the history of the current Nvidia. In Parr 1 of this Special Report I established some of the parameters that will guide my search for the next Nvidia. It’s necessary groundwork, I believe. I’ll start the task of building my list of 10 picks for finding the next Nvidia in Part 2.
Please Watch My New YouTube Video: Trend of the Week Gold with a Copper Kicker
This week’s Trend of the Week is Gold with a Copper Kicker. Going long gold is a good way to go short on the market–gold will go up if the market goes down. Gold mining stocks also have an advantage–an upside kicker–since while mining for gold, the companies also produce a lot of copper. There is growing demand for copper in green energy products like electric vehicles. At the moment, gold stocks are trading on the price of gold alone but miners are adding to copper reserves knowing that it will be a big equity plus. I don’t think these copper kickers are priced into the stocks right now. Newmont (NEM) just purchased Newcrest, which has big copper reserves in Australia and Papua New Guinea, making Newmont not only a global gold leader but also a major producer of copper. Barrick Gold (GOLD) has also increased its copper production substantially. Gold is a great way to hedge the market in the short term, but these copper kickers have long-term upside potential as the cost of copper continues to rise.
It’s not over until it’s over: More Fed officials talk about more interest rate increases
Last week Federal Reserve chair Jerome Powell said that the Fed could hold off on another interest rate increase at its June 14 meeting. That comment wz one reason that the CME FedWath tool showed the odds of no increase at the meeting jumping to 82.6% on Friday, May 19. But today, Federal Reserve Bank of St. Louis President James Bullard and Neel Kashkari, head of the Minneapolis Fed said, essentially, that “could” doesn’t mean will. Bullard backed two more 2023 interest-rate increases and Kashkari said if the central bank pauses next month it should signal tightening isn’t over.
Saturday Night Quarterback says, For the week ahead expect…
I expect more posturing, more attempts to extract leverage, and more blaming–but, in my opinion, no debt ceiling deal this week. The big question: “When does the stock market start to take the possibility seriously–unthinkable as it might be–that the United States could default on its debt.
When will the Treasury run out of money to pay U.S. obligations? Right now Wall Street’s thinking early June
Bloomberg pulled together this list of when big Wall Street names are expecting the Treasury to run out of money and for the U.S. to default on its obligations. Wall Street calls this the X-date.
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