That is The Takeaway from today’s Morning Temporary, which you’ll be able to enroll to receive in your inbox every morning together with:
Bull markets often carry with them great expectations about future growth.
Sometimes those expectations by the investing masses are too lofty given fresh incoming realities.
I fancy that’s the case today as we get able to enter a firehose of reports over the following month that would inject renewed volatility into markets.
Emanating from that firehose includes the potential for market-moving social media posts by President Trump, immediate tariffs on countries like Mexico and Canada, and a late January Federal Reserve meeting where one other rate cut is probably not within the cards (which can draw more market-moving social media posts from said president).
“You could possibly take a look at [hot] names like Palantir, Tesla, a number of the sell-offs that we’re seeing — I feel broadly we’re just going to see some white knuckles in the following six months,” Wedbush analyst Dan Ives told me on Yahoo Finance’s Opening Bid podcast (see video above; listen below). “Trump headline risk, tariffs, 10-year Treasury because it goes to five%, and what does it mean for Fed [are all risks] — and so I feel we’ll see a few of that [volatility].”
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Working example: The markets plunged on Friday after December’s job report blew past expectations, with 256,000 jobs added, in comparison with estimates of 155,000. The S&P 500 (^GSPC) dropped 1.5%, and the Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) each lost 1.6%. The ten-year Treasury yield (^TNX) continued a recent uptick, as investors prepared for a higher-for-longer rate environment.
Prior to Friday, the market had already begun to experience twitches in areas that had been leaders of the bull market.
Investors were left craving for more from Nvidia (NVDA) CEO Jensen Huang’s CES keynote on Monday evening. In response, the stock notched its worst day since Sept. 3 on Tuesday.
Nvidia’s stock is down by 11% since its Jan. 6 intra-day high.
At close: January 10 at 4:00:01 PM EST
NVDA AMD PLTR
Other richly valued momentum names (generally known as “momo” trades) reminiscent of Palantir (PLTR) and AMD (AMD) have sold off greater than 10% up to now month as traders price in a more elevated rate of interest backdrop, a stronger US dollar, and increased headline risks.
The chance-off tone has prolonged to the crypto patch too.
Bitcoin (BTC-USD) is trading at levels not seen since November and is off by about 15% from its record highs.