“There are no notable economic reports today, but the January Fed meeting minutes will be released at 2:00 p.m. ET and that could move Treasury yields and ultimately impact stocks,” writes Sevens Report Research’s Tom Essaye.
“Nvidia has been the ‘poster child’ of AI enthusiasm because NVDA makes the type of semiconductor chips that power generative AI and demand for those chips has gone through the roof,” said Tom Essaye, founder of The Sevens Report.
“I don’t think it means a lot to be honest,” Essaye says. “Because if Nvidia posts good earnings tomorrow, all this is going to be undone relatively quickly.”
“I think what you’re seeing is just some hedging up ahead of the results,” Sevens Report Research’s Tom Essaye told Barron’s.
An important reason why the S&P 500 dropped 1.4% on Tuesday, according to Essaye, was an an overcrowded short side of the options market, which exacerbated the selling.
“Stocks on Tuesday seemed to have an additional influence weighing on the broader market,” Tom Essaye, the founder and president of Sevens Report Research, wrote.
“Instead, the reason stocks dropped was because the CPI report was the first data point in 2024 to not confirm these fantastically positive assumptions that have driven this rally.”
Essaye adds that Thursday’s growth data becomes even more important because the bullish thesis is built on a belief the central bank cuts rates and growth stays stable.
Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the report didn’t imply that inflation was bouncing back significantly, the market had gotten ahead of itself by pricing in inflation crashing to the Federal Reserve’s 2% target.
Sevens Report Research’s Tom Essaye told Barron’s that the Federal Reserve Bank of New York released median inflation expectations from its January survey…