Hedge funds are buying these two big tech stocks while selling two rivals
Everything sold off yesterday: stocks, bonds, gold, and crypto. We opened up even lower today, but dip buyers stepped in for a quick bounce. Semiconductors opened down more than 3% but a half hour later were only down 0.5%. Keeping things in perspective, semis are still up 1.1% for the trailing week, +2.5% for the trailing month, though still down 7.8% from its late October all-time high. NVIDIA almost hit $180 on the open and has rebounded to $188. It appears the sell-off has played out as the NASDAQ is back in the green, and the S&P opened down 91 points and was down only 15 points an hour later.
The sell-off has been attributed to comments by Fed members indicating that a cut in Fed Funds in December is very much on the fence, which was counterintuitive given the apparent weak job data. The market wants a series of cuts by the Fed, which would support high tech valuations and stimulate the housing market and the economy in general.
The Fed seems overly concerned with the inflation side of the equation, a topic that has been hidden by the government shutdown. While food costs have apparently been rising from some surveys, housing costs have been falling, especially rental costs, which are a very big component of the CPI calculation.
Interest rates are not coming down. The US 2-year is flat at 3.59%, the 10-year is up 2 bps to 4.12%. The US dollar index dipped to 98.9 pre-market and has rebounded with stocks to 99.2.
Gold is down 2.4%, back below $4,100/oz, still up 2.2% in a week, but down 2.1% in a month. Silver is down 3.8% today, up 6.4% in a week, and +0.6% in a month. Crude oil is up 2.6% to $60.25/bbl after an attack on a Russian oil depot but remains under pressure after OPEC forecast that worldwide supply will exceed demand in 2026. Natural gas is down 4% today but still up 2.7% in a week, +46% in a month.