Summary
The numbers are in and Nvidia shares aren’t doing much. All seems quiet on the AI front. Based on option pricing, the market expected a move of at least 8% anyway. The option buyers will get hammered, but the option sellers will win as the volatility or premium is sucked out of both call and put options on the stock. Yesterday we talked about the market’s other fixation, government bond yields. The 10-year ended Wednesday at 4.41%, the five-year at 4.28% and the two-year at 4.32%. So although the spread of two/10 is positive again, it is still not that much. The two/10 curve is flat after turning slightly positive in early September. If we go back to 1980, we note that when the curve became positive, it widened very quickly. Furthermore, history shows that when the curve turns positive, the stock market and economy have sometimes suffered terribly. A few examples are 1982, 1990, 2000 and 2007. That could cool stocks, even if no one is talking about it like they have in recent years. This time it could be different as the Federal Reserve used the Fed Funds rate t
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