10.2.24 Markets Steady

Summary

In this briefing, the presenter discusses market trends and key data points, focusing on the S&P 500's performance, which remained relatively stable amidst geopolitical events. The ADP data exceeded expectations, contributing to a positive market outlook with hopes for a soft landing. Key levels for trades in the S&P 500 and QQQ are highlighted, along with insights on stocks like Uber, Alphabet, Nvidia, and Tesla. The presenter emphasizes a cautious yet opportunistic approach to trading, noting that predictability in the market often drives successful outcomes.

Takeaways

• 📈 The S&P 500 had a relatively flat day, closing at 79 cents up, which is considered unchanged in the market context.
• 🧭 The speaker advises managers to stay calm and communicate clearly with stakeholders during market volatility, especially when geopolitical data causes fluctuations.
• 💼 The ADP data came in 20-40K above projections, indicating strong private sector performance without reigniting inflation fears or recession concerns.
• 🛑 The speaker emphasizes the importance of supporting a soft landing in the economy, suggesting that recent data supports this narrative.
• 📊 The speaker accurately predicted support levels for the S&P 500 at 5680 and QQQ at 47840, helping to guide trading decisions.
• 🛠 The markets are handling geopolitical tensions predictably, with the biggest risk being unpredictable events that could cause fear.
• 🔄 Nvidia's performance was highlighted as a major win, with the speaker identifying it as the best in class for semiconductors and predicting a rise due to positive China tailwinds.
• 🚗 Tesla reached a perfect profit-taking point at $265 as predicted, with the speaker advising a potential re-entry if prices drop into the 230s.
• 📉 Google and Uber had more boring, sideways trading days, although Uber provided some opportunities for short-term gains.
• 💡 The speaker remains cautiously optimistic, seeing no signs of a selloff in the near future but acknowledging potential concerns for 2025, particularly regarding tech sector job trends.

Q & A

What is the significance of the S&P 500 closing unchanged on October 2nd?

The S&P 500 closed relatively unchanged, up by only 79 cents, which is considered a flat result. This suggests stability in the market, even though there were some minor fluctuations throughout the day.

How did the geopolitical events mentioned in the transcript affect the markets?

The speaker notes that while geopolitical events in the Middle East and the Carolinas are ongoing, their impact on the market has been predictable. The markets can handle such events as long as they don't introduce new, unpredictable fear. As such, markets remained stable.

What was the importance of the ADP data discussed in the briefing?

The ADP data, which came in about 20,000 to 40,000 jobs over projections, indicated a strong but not overheated private sector. This 'soft landing' scenario is favorable because it supports the idea that inflation is under control without raising concerns about an impending recession.

Why was the S&P 500 level of 5680 important?

The 5680 level was a key support level that the speaker had previously identified, expecting it to provide a bounce. This level was critical because it marked a point of stability following recent geopolitical events and data releases.

How does the speaker view potential market concerns for 2025?

The speaker is monitoring potential concerns for 2025, especially regarding job losses in the tech sector. However, they believe that this may be part of a recalibration rather than a signal of an imminent recession.

What trading opportunities were highlighted in the briefing?

Opportunities included trades on stocks like Uber, Nvidia, and Google (Alphabet). Nvidia, in particular, was cited as a standout performer, with a strong move from the support level of 115, making it a ‘lit banger,’ according to the speaker.

What were the expectations for the non-farm jobs report mentioned in the transcript?

The speaker expects the non-farm jobs report to be relatively positive, though they note that the ADP data does not give enough information to predict the exact outcome. A disappointing jobs report could trigger a market sell-off, but the speaker believes this is unlikely.

Why was Tesla’s stock at $265 seen as a profit-taking point?

The speaker identified $265 as an ideal point to take profits on Tesla due to short-term market conditions. They suggest that while the long-term outlook remains positive, this level presented a tactical opportunity to secure gains.

What is the speaker's strategy regarding Nvidia's stock?

The speaker was bullish on Nvidia, especially at the $115 support level, which aligned with broader market views. Nvidia was seen as oversold, and the speaker expected a strong bounce back, making it a good candidate for a swing trade.

What overall market sentiment does the speaker convey for the near future?

The speaker is generally optimistic about the market’s near-term prospects, noting that as long as there are no major negative surprises (like a bad non-farm jobs report), the market could continue pushing higher into October, potentially reaching new all-time highs.