Video summary
The daily market session concluded with the S&P 500 reaching near-session highs, gaining eleven points to trade at 7,703, while the Nasdaq 100 pushed past its morning levels following Nvidia's earnings report. The Dow Jones Industrial Average experienced a slight rotation and finished in the red, dropping one hundred points to settle around 53,549, whereas the Russell 2000 remained negative by one point. Despite the overall bullish momentum in tech-heavy indices, gold prices pulled back by one percent to $4,647 after rising nearly fifty percent over the previous five weeks, and crude oil traded with volatility near $81.98 before retreating slightly from levels above $83.
A significant focus of the recap was the Personal Consumption Expenditures (PCE) inflation report, which showed a headline increase of 3.7% year-over-year and a core rise of 3.3%, leading to higher yields at 4.66% and a modest strengthening of the dollar. The speaker explained that the Federal Reserve prefers the PCE gauge over the CPI because it better reflects consumer spending habits, particularly regarding healthcare costs which are often employer-paid rather than out-of-pocket. This distinction results in housing representing only 15% of the PCE index compared to 32% in the CPI, making the PCE a more relevant metric for the Fed's policy decisions on core inflation elements they can influence.
Beyond market data, the discussion touched on regulatory challenges facing major technology companies, specifically noting that Meta is paying eighteen billion dollars in fines related to children's screen time addiction, money that could have otherwise been invested in data centers. The speaker also highlighted Nvidia's stock performance, observing that while shares were down slightly ahead of their earnings, they are currently trading at levels similar to those seen a year ago after previously reaching all-time highs. Additionally, the transcript briefly addressed the severe natural disasters affecting Nepal, expressing concern over the tragedy and the power of nature before concluding with a reminder for traders to spend their time wisely amidst inevitable winning and losing trades.
Read the full video transcript
Good afternoon, folks. Tommy O'Brien
coming to you live from TFN. 3 PM
Eastern time, final hour of the trading
day. And we got markets push into
session highs on the S&P as I come to
you. S&P is right now up 11 points,
trading at 7703. And yeah, that's a good
33 points off of almost where we were.
The lows made at about 1245
this afternoon. NASDAQ 100. We got
Nvidia earnings after the bell today.
Just breaking over those morning highs
as well. Up by 79 points or 310% 29,356.
The Dow right now little rotation as the
Dow's in the red off by 100 points.
53,000 from excuse me 53,549.
And the Russell negative by one point
trading at 3,3. We get the PCE this
morning. We'll talk a little bit of
inflation.
And with that, we got lower price,
higher yield. 4.66%
is the number. You see the volatility at
about 8:30 this morning when we got that
PCE number. We'll jump over to that
number in a moment, but the headline
number was 3.7% year-over-year. Core 3.3
monthly basis 2% core and headline.
So we get a little bit higher yield as
PC inflation picks up a little bit.
Dollar gets a little bit of strength up
by 25 pennies at 9916 with a stronger
dollar. Gold pulls back by 1%
off $47 at 4647 right now. We jump over
to crude. Little volatility on crude,
but all things considered an 81 handle
in crude at $81.98 as low as $79. You
accelerate higher above 83 and we back
off a bit. Take a look at that volume
and crude
at 230,000 contracts on a little bit of
a bounce right now. 265 was the number
yesterday. We take a look at gold for
some volume numbers
and yeah, backing off with lighter
volume. 144,000 contracts right now.
Look at the last 5 days.
All right. 241, 180, 190, 203,
and 174. and we'll probably come in
around 174. We're at 144 right now as
gold pulls back with a little bit of
higher yield, dollar strength. We jump
over to Nvidia ahead of their earnings.
So, Nvidia have been lagging this market
to a certain degree. Got alltime highs
out here of 236 from May. We've backed
off over the last eight sessions or so.
Put this thing on a weekly.
Pretty wild with trading prices. you
traded at 10 months ago in Nvidia 2112
and you got 21219 the high in October.
So we'll get their earnings after the
belt. Take a look at the heat map.
NASDAQ 100 Google a little bit in the
red micron up 1% right now.
All right, let's take a look at those
inflation numbers.
Inflation remains elevated as energy
costs. Yeah, that's going to be part of
it. Now the headline number was 3.7%.
Okay, this is the PCE, the personal
consumption expenditure. This is the
Fed's preferred inflation gauge because
of how it's calculated
on a core basis, which is which they
prefer the core versus the headline.
Okay, they have a greater control over
the core elements. So that's the ones
they're worried about. They're not going
to tweak their policy if the prices that
are in the index, they can't influence
the cores. they might be able to
influence,
right? They can't influence crude as
easily. The point being,
so core prices up 3.3% year-over-year,
unchanged from June,
which is 3.3%. And on a monthly basis,
the main the headline number was up 2%
in a month. And the core prices were up
2% in a month as well. Those aren't that
bad. Multiply it by 12, you're at 2.4.
four.
Now, when you look at the CPI versus the
PCE, folks,
the way you want to think about the
difference is that there are certain
items that we consume that we don't
necessarily pay for. And one of the
greatest examples of that is healthcare.
because you get it through your job. You
a majority of people in the workforce,
you consume it, but you're not
necessarily
paying for it yourself. And that's where
you get these different waitings. So the
PCE, which is what the Fed prefers, you
can see how much of a smaller impact
housing has. Okay, CPI, it's a dramatic
and that's because CPI has a very small
health care component, but PCE is a much
bigger component because whether you're
paying for those health care costs out
of pocket or your employer's paying for
them, but if your employer's paying for
it, right, that's going to be reflected
in prices even if you're not paying for
it, which is why they prefer that PCE.
And yeah, food, housing, health care,
50% of the PCE, right? Then you got
financial, recreation is in orange,
transportation other, but you can see
that dramatic shift and housing is only
15% of the PCE. It's 32%
of the CPI.
All right? And boy,
keep the people of Nepal in your in your
thoughts because boy, there's not the
words can't say it. The visuals coming
out in terms of the disaster going on
out here and it's it's you know, mother
nature unfortunately the power of mother
nature and boy tragedy
without a doubt.
Okay, you jump over to MetaShares. So
they pay $18 billion.
You could have used that money to build
more data centers. Completely sarcastic,
folks. I'm glad that they're going to be
most of all, okay, and this is maybe
what the states, you know, it's
probably, of course, it's about the
money. 18 billion is a decent amount of
money. It's going to be split up among
the states.
California can get a couple billion, I
think. I'm not sure how that's going to
break down, but they're also going to
put in policies that are going to
change,
you know, how long you can be on it,
when you can be on it overnight, the
addiction factor of children. And we'll
see how those come out. But that's a
real deal cuz there's good screen time,
bad screen time, it all can be
addictive. And yeah, I'm fairly certain
certain that they were no fools and they
were quoting I mean, that's that's the
whole deal, right? It's the next
generation,
right? And if anything, hey, for what
it's worth, Meta higher by 1.5% and you
got Nvidia coming into their earnings
right after the bell tonight, folks,
down by 1% coming in. And yeah, you're
talking about Nvidia shares right where
we were a year ago. Pretty remarkable
you put in that context.
Jump over to Amazon down by 4/10%.
And gold down by 1% as you have the gold
equities giving back some of the gains
of 2.3%. But keep in mind, folks, gold,
yeah, you're up almost 50% over the last
5 weeks. All right, folks. We got to
video earnings after the bell. Thanks so
much for tuning in. Have a great night,
folks. Have a safe night. Enjoy your
night out there, folks. Your time, the
one thing you can't get back. You're
going to have winning trades. You're
going to have losing trades, folks. But
spend that time wisely. Enjoy it, folks.
Have a great night. Thanks so much.
We'll see you tomorrow, folks.