Of our great go to guests, Ben Emmons, founder and CIO at FedWatch Advisors, my man, nice to see you here today.
You and I both wore our red ties, and yet the market said no, no, we're going to go to green today.
Forget what those guys have to say.
So listen, we're we're not on the technicals at all-time highs, but we're basically at all-time highs.
The market has been incredibly resilient, shaken off one concern after another concern.
How are you thinking about how we are placed in these markets as we inch a little bit closer to September?
We are going to go with a big volatility period, I think, JD, because what people's mind right now is that these midterm elections are going to be right in sight, and it could change things because what we're seeing playing out with Iran, what we're seeing playing out with Canada, it's all playing into this midterm election battlefield.
I think markets are judging the AI premium in the markets is very high.
There's a lot of political backlash to the data centers, and it plays in the midterm.
So we're a good market currently, not bearish, but I do think there's a volatility period between now and the midterm elections until we clear that out.
Speaking of data centers, speaking of AI, this time tomorrow we will hear from Jensen Wong and his famous Tom Ford leather jacket, the latest quarterly results for Nvidia, not just the powerhouse of the AI.
AI trade in a lot of ways, Nvidia is also the banker of the broader AI trade.
What has to go.
Right for the stock to rally after earnings unlike what we've seen in the last 4 quarters.
So one thing with Nvidia has always been that the estimates are very high and then Nvidia beats that estimate, but the expectation is even higher than the beat, and that's why the stock has been so dreadful afterwards.
Options markets are implying a 7% move that's been kind of consistent the last few quarters.
So what has to go right here is that, the story about.
Prices on various different components was out the other day, that that is not something that is going to be broad based because that's not good for margins.
I think markets see that negative.
Second, you mentioned they are financing equity in all these different hyper scales and other companies.
What's their plan there? because that's been the risk to the Nvidia stock is that the CDS of Nvidia has blown out because of that increased equity risk.
So I think that's what markets will be paying attention to.
Get to the earnings.
Great beats.
It's going to be a good beat for sure.
That's why stocks are rallying, but I'm not sure if it's going to be a good story afterwards.
Yes, it's a jam packed day.
We get inflation print, then we get Nvidia earnings.
Thursday we get weekly jobless claims.
Friday, the first Jackson Hole speech from relatively brand new Fed Chairman Kevin Warshch.
What do you expect that he can communicate at Jackson Hole that maybe we have not yet heard from him?
The couple of FOMC meetings we've already seen him behind the podium.
So I think it's going to be a more clearer view on the economy.
He wasn't so specific about what the economy is doing, what inflation is doing, how he views it, so that I think we do see in the speech.
But then unfortunately the theme for this Jackson Hole is about payment systems and that sort of thing, financial innovation, interesting, but nothing. monetary policy, so he does have an excuse to say, great, I can just not say anything at all because I'm going to focus on financial innovation and payment systems and not tell anything about monetary policy.
I think that's what will happen.
We just don't get any signals from him, but he will outline what the economy is doing.
That's typically the intro of the speech.
And that I think is what Marcus will grab the phone, will blurt from, and say like, OK, this is your view now, and that's where the move will come into the markets.
Of course, Ben, unfortunately I'm out of time.
I know you brought us some stock picks as well, but come see us again in the next couple of weeks.
We'll talk about those.
Ben Emmons, founder, CIO at FedWatch Ad Pfizer, it's nice to see you again.
Good to see you, Jay.
