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If inflation is cooling, you would never know from those retail sales numbers that came out today. I’m not going to get into all the data, but the numbers were better than expected. One item that I found interesting was the Food and Drink numbers; like going out to dinner, it was up 14.1% y/y. Interestingly, it steadily decreased, but it recently turned higher again. That’s inflation. I have seen it first hand, in my own experience.
Inflation, from my perspective, is just moving around and shifting, and perhaps more importantly, the University of Michigan number that shows inflation expectations among consumers is rising again. Meanwhile, the NY Fed inflation expectation for consumers was growing too.
It is also worth mentioning that the Atlanta Fed sees 4Q growth at 4.4%, so if there is a recession, I’m not seeing it yet.
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Why do I bring this up? Well, the FOMC minutes are coming on Wednesday, the day before Thanksgiving. Five governors will be talking tomorrow, on top of 3 or 4 today. So all of them, from my standpoint, made it pretty clear that slower does not mean fewer, and I hear that 5 to 5.25% target rate more often than not.
S&P 500 (SPY)
Meanwhile, the S&P 500 closed lower by about 80 bps at 3958. If that 3950 level breaks, it is not going to be good. That is a considerable level that, if broken, probably leads to that gap at 3,750 getting filled. Again, it looks very much like a diamond reversal top and not all that different from those we saw in August and early October.
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Nvidia (NVDA)
Nvidia results were mixed at best, with revenue coming better than expected, while earnings were $0.58 per share, missing estimates of $0.70 per share. Adjusted gross margins came in at 56.1% versus forecasts of 64.9%. The outlook wasn’t much better, with revenue guided to $6.0 versus estimates of $6.09 billion. The stock is up slightly after hours, despite running up about 50% from the October lows. My guess here is if the stock does go up, that is an IV melting-type situation then because the results were far from stellar. Implied volatility for the November 18 expiration date was at 140% today.
I think that is going to be all for today.
-Mike
Charts used with the permission of Bloomberg Finance LP. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Past performance of an index is not an indication or guarantee of future results. It is not possible to invest directly in an index. Exposure to an asset class represented by an index may be available through investable instruments based on that index. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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