Tom Nash
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NO BS Weekly Market Recap - Members Exclusive
🕑 Added 2024-09-21 07:50:29 +0000 UTCLet’s start with the S&P 500. The market's been through the wringer recently, and on August 5th, it felt like we were staring down the barrel of a crash. But fast forward to September, and after a few growth scares and some seasonally weak trends, the S&P 500 rebounded with a vengeance.
As of last Thursday, it broke through its July high to reach a new all-time high.
But hey, before you start popping champagne, remember that this market can flip on a dime.
Yeah, the VIX volatility index spiked to 65 in early September, making everyone nervous, but it’s settled back down around 16 now. So, volatility has chilled a bit, but we’re not exactly out of the woods yet.
The Fed did cut rates, but the housing market still isn’t on fire, and higher yields aren’t making anyone rush to their realtor. Plus, earnings season is just around the corner, and with companies like FedEx looking rough, the potholes in the road aren’t exactly tiny.
The Federal Reserve’s Rate Cut: A Sugar Rush for Markets?
The Fed decided to cut rates by 50 basis points. For investors, that’s like the market equivalent of giving a hyperactive kid a tub of candy. It didn’t take long for Wall Street to break out into what they’re calling the “everything rally.” Both the S&P 500 and the Dow hit record highs on Thursday, with big names like Nvidia and Apple leading the charge.
Now, while investors are betting this will help the Fed achieve the soft landing, bringing inflation down without sparking a recession, let’s not get carried away. This is the same Fed that just spent the last 30 months falling ass backwards into a win in a war on inflation which it had no business winning.
Now, the same people who got lucky to make it this far, are feeling emboldened, and now the “experts” are “recalibrating” interest rates to keep the economy afloat, but you better believe there’s still a long way to go before we get to the promised land.
The Fed’s strategy feels a lot like trying to fix a leaky boat with duct tape. It might hold for now, but don’t be surprised if we’re all swimming in sewer water quite soon.
While inflation risks have eased, the job market’s losing momentum fast. The Fed's cut may have temporarily stabilized markets, but it doesn’t fix the underlying issue. One bad jobs report, and it’s back to square one for us, so wait with buying that mansion.
Small-Cap Stocks: Tom Lee’s Favorite Kid
Let’s talk about small-cap stocks.
They’ve been on a rollercoaster, and I’m not sure if anyone’s strapped in properly. The Russell 2000 index jumped 11% in July, only to lose those gains in early August after a weak jobs report sent investors scrambling. It’s like one minute, everyone loves small caps, and the next, they’re tossing them out the window.
The Fed’s rate cut might help bump up small caps, but we’re still waiting on stronger economic data to give these stocks a real boost.
Qualcomm Eyes Intel
In tech drama, Qualcomm recently approached Intel about a possible takeover, which if it happens, would be one of the biggest tech mergers ever. Intel, once the king of chips, has been on a steep decline, with its stock down 53% this year. Meanwhile, Qualcomm’s doing a bit better, though its stock took a slight dip when news of the potential deal leaked.
What makes this all the more fun is that Qualcomm and Intel are competitors in several markets. Qualcomm doesn’t manufacture its own chips; it leaves that to companies like Taiwan Semiconductor Manufacturing Company. Intel, on the other hand, is still spending insane amounts of money ($100 billion over five years) on manufacturing its own stuff.
Now, whether or not this deal actually happens is a big question mark. With both companies doing business in China and antitrust enforcers being notoriously fussy, a merger could easily get blocked. But let’s be honest, in the cutthroat tech world, Intel might need this deal just to stay relevant.
The Amazon Office Drama: Sherriff Jassy Lays Down the Law
Let’s pivot to Amazon, where CEO Andy Jassy just dropped a bomb on the workforce. Jassy’s ordering everyone back to the office full time starting January 2nd. Cue the collective groan from every Amazon employee who thought hybrid work was here to stay.
Before this, a lot of companies had reached a sort of unspoken agreement with employees: work from home a few days a week, no big deal. But Jassy, in true “let’s shake things up” fashion, decided Amazon employees need to be in the office five days a week. The reason? To foster collaboration and connection. Sounds nice, right? But current and former Amazon workers are calling this out for what it really is: a “soft layoff” of sorts. The kind where they make life so inconvenient that people quit voluntarily.
Palantir’s CEO Cashes Out: Karp’s Haircut Fund?
Now, onto Palantir and its CEO Alex Karp. Recently, Karp sold $325 million worth of Palantir stock, which, naturally, got some people riled up. Is the CEO jumping ship? Nah, not really. Palantir’s stock is up 100% this year alone, and Karp’s probably just cashing in to handle some tax bills from his vested options. Honestly, can you blame him?
People love to get dramatic when a CEO sells stock, but come on, if your shares went up 386% in 18 months, you’d be selling too. And let’s not forget, Palantir could still have massive growth ahead of it, possibly 10x or more. So Karp’s not bailing; he’s just doing some smart financial planning.
By the way, there’s a rumor floating around that Karp’s stock sale is actually funding a much-needed haircut. Palantir’s doing great, but his hair? Not so much.
That said, Karp’s move could signal he thinks Palantir’s stock is hitting a short-term peak. If you’re in it for the quick gains, maybe it’s time to jump ship. But for the long-term investors, this is just noise.
The Week Ahead: Earnings, Conferences, and the Fed
Looking forward, there’s a lot going on. Monday kicks off with investor events for FedEx and Braze. If you’re into volatility, keep an eye on options trading for stocks like Intuitive Machines and Azul—things are heating up there. Tuesday is earnings day for AutoZone, and options trading implies we could see a big move in Stitch Fix stock after their report.
Meta’s hosting its Meta Connect event on Wednesday, where they’re expected to show off some shiny new toys in AI, VR, and the Metaverse. Will it be as exciting as last time? Who knows, but it’s Meta, so expect the hype machine to be in full swing.
On Thursday, Costco, Accenture, and CarMax will be reporting earnings. Oh, and if you’re a space nerd, SpaceX is launching a Falcon 9 rocket to the International Space Station, so that’s happening, too. Plus, keep an eye on Karuna Therapeutics, they’ve got an FDA decision coming up that could be huge for schizophrenia treatments.
Closing Thoughts: Hang Tight, It’s Gonna Be a Bumpy Ride
So, where does all this leave us?
Well, the Fed’s sugar rush may have temporarily lifted markets, but we’re not out of the woods yet. Small-cap stocks are still volatile, and the tech world is as competitive as ever. Meanwhile, corporate America is starting to crack down on remote work, with Amazon leading the charge. Will it backfire? Possibly.
Will it succeed? Maybe. Either way, the next few months are gonna be wild.
Comments
Ingo Schroeder
Thank you for another insightful summary Tom….. looks like there’s more happening than with the early settlers
Generico Fakero
🫡
Generico Fakero
🫡
Jack M
So DCA it shall be. Thank you.
Nic
Great info and even better jokes embedded inside to keep me going!! Love your content brother
Miketea
Thanks tom. I always love market updates with unbiased opinions.
Generico Fakero
🫡
Generico Fakero
I always say DCA is the better choice in almost every scenario
Generico Fakero
Lol
EV Bike Dude
Maybe Alex can sell some hair to Elon or Jeff. :)
Jack M
For SCHD fans, ex-dividend is next week too on 9/25. Have a CD maturing to invest, always the question... Bulk buy or DCA?
Tom
Good on Jassy. The pandemic ended years ago…it’s time for the WFH gravy train to end.
Generico Fakero
Thanks David
David
Thanks Tom Incredibly insightful !
