Video summary
The Tom O'Brien Show concludes its daily broadcast with the S&P 500 nearing session highs and recovering from mid-afternoon lows, while the Nasdaq 100 continues to climb ahead of Nvidia's earnings report scheduled for after the bell. The Dow Jones Industrial Average shows slight rotation in the red, and the Russell 2000 remains negative as markets digest the latest inflation data released earlier that morning. Personal Consumption Expenditures (PCE), the Federal Reserve's preferred gauge for tracking inflation, came in at a headline rate of 3.7% year-over-year with core inflation holding steady at 3.3%, indicating that price pressures remain elevated but manageable on a monthly basis. Consequently, Treasury yields rose to 4.66%, causing the dollar to strengthen and pulling gold prices back down despite its significant gains over the previous five weeks.
A detailed analysis of the PCE report highlights the structural differences between it and the Consumer Price Index (CPI), particularly regarding how healthcare and housing are weighted. The host explains that because many Americans receive health coverage through employers, these costs are reflected in the PCE even if not paid directly by individuals, whereas the CPI places a much heavier weight on housing at 32% compared to just 15% in the PCE. This distinction is crucial for the Federal Reserve's policy decisions, as they prioritize core elements they can influence rather than volatile items like crude oil prices that are harder to control. The discussion also touches on the volatility seen in energy markets, where crude oil fluctuated between $79 and $83, reflecting ongoing uncertainty in the sector.
Beyond market data, the show addresses significant geopolitical and social issues, including a somber moment dedicated to the natural disasters affecting Nepal and a critical look at Meta's recent decision to pay $18 billion in fines related to child safety policies. The host uses sarcasm to note that this fine could have funded additional data centers but acknowledges the necessity of stricter regulations on screen time and addiction factors for the next generation. As the trading day winds down, attention shifts back to major tech stocks like Nvidia, which has lagged recently despite hitting all-time highs earlier in the year, and Amazon, which saw a slight decline. The broadcast ends with a reminder to viewers to enjoy their evening and spend their time wisely, acknowledging that both winning and losing trades are part of the trading journey.
Read the full video transcript
The following is a presentation of TCNN.
>> The Tom O'Brien Show is produced every
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>> Now, Tom O'Brien.
>> Good afternoon, folks. Tommy O'Brien
coming to you live from TCNN. 3:00 p.m.
Eastern time, final hour of the trading
day and we got markets pushing to
session highs on the S&P as I come to
you. S&P's 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 12:45
this afternoon. Nasdaq 100, we get
Nvidia earnings after the bell today.
Just breaking over those morning highs
as well. Up by 79 points or 3/10%
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
for the 3013.
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 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 PCE 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 8198 as low as $79. We
accelerate higher above 83 and we back
off a bit. We take a look at that volume
in 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.
Right? 241, 180, 190,
203,
and 174.
And we'll probably come in around 174.
We're 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. You got
all-time 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.
211 12
and you got 212 19 the high in October.
So, we'll get there earnings after the
bell. Take a look at the heat map.
Nasdaq 100 at 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 what 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 core prices 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 0.2% in a month
and the core prices were up 0.2% in a
month as well. Those aren't that bad.
Multiply it by 12 you're at 2.4.
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 health care 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
weightings. 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 healthcare
component. But PCE is a much bigger
component cuz whether you're paying for
those healthcare 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, healthcare, 50% of the
PCE.
Right? Then you get financial,
recreation is in orange, transportation,
other.
Then 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 that 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 dollars.
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 they're 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 the 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
remarkably 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
off 2.3%, but keep in mind, folks, gold
yeah, you're up almost 50% over the last
5 weeks.
All right, folks, we got Nvidia 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.