S&P 500 climbs, but Nvidia slip keeps lid on gains
Today will be all about Nvidia’s (NVDA) quarterly announcement and the grand finale of this earnings announcement season. As always, Nvidia’s guidance will be crucial. Click here to listen to Louie’s preview on NVDA earnings.
If you like to worry, the Private Credit industry had an earthquake on Tuesday after Blue Owl imposed a withdrawal limit on one of its funds ahead of a planned merger. Specifically, Blue Owl (OWL) plans to combine its $1.8 billion non-traded business development company, Blue Owl Capital Corporation II, with its much larger, publicly listed counterpart, Blue Owl Capital Corp. (OBDC), which manages roughly $17.6 billion. Until that merger is completed, which Blue Owl expects to occur in early 2026, investors in Blue Owl Capital Corporation II will not be able to make redemptions.
When this merger occurs, the holders of the private vehicle will receive shares of OBDC. However, based on where OBDC stock trades now, investors could incur losses of up to 20%, based on the discount between OBDC’s market value and the private fund’s underlying assets. Ouch. This is a major scar for the $3 trillion private credit industry. If there are more systemic problems in the private credit industry, then the Fed would have to slash key interest rates by up to 1% to rescue the banking and private credit industries, which are intertwined.
Heading into Thanksgiving, the Trump Administration has lowered tariffs on beef, bananas, coffee, and dozens of agricultural products in an aggressive attempt to lower food costs. According to The Wall Street Journal, the average retail prices for ground roast coffee rose over 40% in the past year (due somewhat to a drought in the equator), ground beef up 11.5% (due to the smallest cattle heads in decades), and bananas up 8.6%.
Although most food comes from the U.S., the Trump Administration is also lowering these trade barriers so other countries buy U.S. agriculture products, Jake Colvin, the president of the National Foreign Trade Council said “It’s certainly a step in the right direction, but it’s important to recognize that the pain that American working families and businesses feel from tariffs goes way beyond coffee and bananas.”
The other interesting news is that President Trump said his administration may hold talks with Venezuelan President Nicolas Maduro as the U.S. military buildup near the South American country grows. The USS Gerald R. Ford aircraft carrier is now in the Caribbean. The U.S. military recently carried out its 21st strike on a boat transporting drugs and has killed 83 people on suspected drug boats.