Nvidia, NQ Lead Super-Charged Rally

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I knew early yesterday there was going to be a big pop/upside stop run — the latter of which I wrote about in the Lean: 

“We have yet to see a good stop run, which I think will happen…I suspect that it's business as usual — pullback (either after the open or sometime early morning) and then rally back up.”

After the open, the ES dropped 22 points while the NQ was making new highs as Nvidia continued to rise, taking other big name tech stocks for the ride. The up-tick in the futures was incredible, it just kept going up and up and up with NVIDIA leading the pack. 

From its April 9th $762 low to yesterday's $1,224.50 high, NVDA stock has rallied $462.50, while the 10-year bonds have rallied ~3% in a few days and 7% in a few weeks as the yield on the 10-note fell for a fifth consecutive trading day to 4.289% — its lowest settlement since March. NVDA’s 5.2% rally took other big-name stocks (like AAPL) higher too, as the latter closed up 0.80% and logged its eighth straight day of gains with the Nasdaq and the S&P settling at all-time record closing highs.

Do you think the current volatility will continue?

B of A 

Bank of America analysts said on Tuesday that their clients have now been large net sellers of US stocks for five weeks in a row. Just last week, they sold off $5.7 billion more in stocks than they purchased, the highest outflow since last July and the low volumes, eventful markets tides appear to have shifted and the usual summer doldrums are nowhere to be found.

Morgan Stanley 

“Summer 2024 may prove volatile, with momentum stalling amid policy uncertainty,” wrote Morgan Stanley Wealth Management Chief Investment Officer Lisa Shatlett in a note this week. “Economic crosscurrents have left the [Federal Reserve] more tentative regarding rate cuts, amplifying the potential significance of each data point as debate continues over the degree of policy restriction,” she said. 

No one really knows what's going to happen, but I do agree with the increase in volatility. Prolonged high interest rates, inflation, the dollar, geopolitical concerns and the US presidential election are front and center.