People Are People
And they are irrational.
As he often does, the great Eddy Elfenbein dropped some really good knowledge during his conversation with Jim O'Shaughnessy on the April 18 InfiniteLoops podcast.“There’s no such thing as the market,” Eddy explained. “There’s just people.”
And, after selling Big Tech on Friday, people were buying Big Tech on Monday. The Nasdaq Composite closed last week with a 2.05 percent loss and opened this week with a 1.11 percent gain.
Nvidia $NVDA – the most important stock on planet Earth, according to the people on Goldman Sachs’s $GS trading desk – was down 10.00 percent on Friday and was up 4.35 percent on Monday.
What changed?
Well, maybe people have a better appreciation for what Meta Platforms $META and Microsoft $MSFT and Alphabet $GOOGL will have to say later this week about their plans for AI hardware spending.
The thing for NVDA will be finding a happy place in the market for its recently introduced Blackwell chips while those heavyweights invest in AI data centers as well as their own chips.
As Eddy said to Jim, "That's one of the problems about quantitative things is you're trying to add numbers, you're trying to distil something that is at root is just highly emotional, and it's a very human entity."
That’s just the way it is with markets and people: irrational, no real rhyme or reason from one day to the next, a fantastically complex system comprising innumerable decisions by uncountable humans.
The good news, as Mish Schneider notes at the conclusion of her Weekly Market Outlook, is that we’re in a blackout period for Federal Reserve speakers all the way until the press conference following the May 1 Federal Open Market Committee meeting.
That means the market could find its way in terms of interest rates as well as earnings, “on its own without interference,” as Mish put it. We have more from Mish below.
Until Friday’s release of Personal Consumption Expenditure Price Index data for March, earnings from META (after Wednesday’s close) and MSFT and GOOGL (after Thursday’s close) are The Most Important Thing.
But we will have updates on the US housing market, the services and manufacturing sectors, and gross domestic product too.
People probably won’t react as much to those less fascinating figures.
