Good morning,
Last Friday’s sharp mid-day rebound erased a weak opening, leaving the S&P 500 essentially flat for the day (-0.05%) and for the week (-0.07%). The now-familiar pattern of early-week strength followed by late-week weakness held once again—and will be tested today. The S&P 500 has posted gains on nine consecutive Mondays. As of this morning, Futures are flat, offering little indication whether a tenth will be added to the streak. Then again, once a pattern becomes obvious, it usually ends.
The next Fed meeting is 23 days away (December 10), and much of the conversation until then will likely revolve around the slow restoration—and uncertain reliability—of government economic data. Not exactly inspiring. We may get a brief distraction midweek when NVIDIA reports earnings on Wednesday night. Historically, those results have served as a sentiment barometer for the broader AI investment theme. To date, record profits for NVDA have consistently led to “sell-the-fact” market reactions. But again, once the pattern is obvious, it usually ends.
Finally, under the heading of head-scratcher: last week saw a surge in near-term call-option volume on the VIX 60’s – roughly triple where it currently trades. Someone clearly expects fireworks.
Be well,
Mike