Nasdaq 100 Faces Intraday Dip Amid Cautious Market Sentiment
The Nasdaq 100 experienced a reversal of initial gains following Nvidia‘s earnings report, currently showing a decline in intraday trading. While Nvidia released strong reports and saw price target increases, a more cautious market mood is developing due to concerns about potentially overheated valuations and the risk of significant market corrections.
federal Reserve official Lisa Cook recently cautioned that elevated valuations in stocks, corporate bonds, real estate, and leveraged loans heighten the potential for sharp market declines, despite the overall resilience of the financial system. Investor Ray Dalio echoed this sentiment, noting markets are trading at relatively high levels, but advised against immediate position unwinding, emphasizing the importance of portfolio diversification as a consistent strategy.
Recent US jobs data presented a mixed picture. The September report indicated the economy added 119,000 jobs, exceeding expectations. However, the unemployment rate rose to 4.4%, the highest level since October 2021.Wage growth was reported at 0.2% month-over-month and 3.8% year-over-year, both falling short of forecasts. Initial jobless claims came in at 220,000, below the anticipated 227,000. Job gains were concentrated in healthcare and the restaurant sector, while transportation and business services saw declines.
This data generally supports the expectation of potential future interest rate cuts, tho money markets are currently leaning towards a possible pause in December. The probability of a 25 basis point rate cut at the December 10th meeting is currently assessed at 41.79%.
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