A good earnings report from Nvidia (NVDA) combined with some oversold technical readings had the market off to a good start on Thursday morning. Traders, however, were reluctant to chase the early strength, and the indexes reversed sharply and fell into negative territory at mid-day.
There wasn't any news catalyst, but the dip buyer stepped up and ran the indexes almost back to the early highs before a slight pullback. At the end of the day, there was plenty of green on the screens, with breadth running 5,400 gainers to 2,700 decliners. Due to the intraday weakness, new lows hit 160, while new highs were just 75.
The action was volatile and uneven, but was mainly a function of positioning in front of the personal consumption expenditure inflation report due out at 8:30 a.m. on Friday. Revised gross domestic product data and PCE for the fourth quarter showed that growth was lower and inflation higher than initially reported, but that is old news, and the market is looking ahead to the data we will get in the morning.
The best thing about the action today was more speculative trading. There is a long list of stocks moving more than 10% and some aggressive retail movement.
The big question that the market is struggling with right now is whether or not potential Fed rate hikes, higher inflation, and slower growth are already well-anticipated and priced into the market. That is the bull's main argument right now, but they will need some sustained positive action to attract more interest.
Have a good evening. I'll see you in the morning.