This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
Bull markets often carry with them great expectations about future growth.
Sometimes those expectations by the investing masses are too lofty given fresh incoming realities.
I fancy that is the case today as we get ready to enter a firehose of news over the next month that could inject renewed volatility into markets.
Emanating from that firehose includes the potential for market-moving social media posts by President Trump, immediate tariffs on countries like Mexico and Canada, and a late January Federal Reserve meeting where another rate cut is probably not in the cards (which may draw more market-moving social media posts from said president).
“You could look at [hot] names like Palantir, Tesla, some of the sell-offs that we’re seeing — I think broadly we’re just going to see some white knuckles in the next six months,” Wedbush analyst Dan Ives told me on Yahoo Finance’s Opening Bid podcast (see video above; listen below). “Trump headline risk, tariffs, 10-year Treasury as it goes to 5%, and what does it mean for Fed [are all risks] — and so I think we’re going to see some of that [volatility].”
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Case in point: The markets plunged on Friday after December’s job report blew past expectations, with 256,000 jobs added, compared to estimates of 155,000. The S&P 500 (^GSPC) dropped 1.5%, and the Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) each lost 1.6%. The 10-year Treasury yield (^TNX) continued a recent uptick, as investors prepared for a higher-for-longer rate environment.
Prior to Friday, the market had already begun to experience twitches in areas that had been leaders of the bull market.
Investors were left yearning for more from Nvidia (NVDA) CEO Jensen Huang’s CES keynote on Monday evening. In response, the stock notched its worst day since Sept. 3 on Tuesday.
Nvidia’s stock is down by 11% since its Jan. 6 intra-day high.
At close: January 10 at 4:00:01 PM EST
NVDA AMD PLTR
Other richly valued momentum names (known as “momo” trades) such as Palantir (PLTR) and AMD (AMD) have sold off more than 10% in the past month as traders price in a more elevated interest rate backdrop, a stronger US dollar, and increased headline risks.
The risk-off tone has extended to the crypto patch too.
Bitcoin (BTC-USD) is trading at levels not seen since November and is off by about 15% from its record highs.
