U.S. stocks are sure to open sharply higher tonight!
First, why do I think they’ll open higher?
The Nasdaq could open up around 1%, and the S&P 500 up 0.7%.
They’ll pull back after opening higher, but they probably won’t break down today—because the things that really needed to fall already did last week.
Three forces are pushing stocks higher
First, futures
During the Asian session, Nasdaq 100 futures were up as much as 1.3%. Based on the closing price of 29,187, that’s 380 points, not 200.
Second, Warsh
Last week at the IMF, he declined to make a prediction about October. The market cut its bets on an October rate hike from 28% to 15%, and CME now puts the odds of no change in October at 83.9%.
Third, oil
WTI fell to 97.29 this morning, and Brent to 107.65, down 2%. The trigger: Russian diesel is expected to enter the U.S. market within 15 to 20 days.
All three point in the same direction: the denominator is improving.
Keep an eye on three things tonight, in order of importance.
First, CoreWeave premarket.
It’ll tell you sooner than the 10-year Treasury whether the credit market is stabilizing.
It closed at 61.39 last Friday. If it breaks down again today, the Nasdaq’s higher open won’t last an hour.
Second, SMH’s trading volume in the first hour after the open.
After eight straight down days, short sellers have had $32 billion in unrealized gains over the past seven days.
Those gains give them a reason to cover, but also provide ammunition to add to their short positions.
A rally on strong volume would signal a reversal; a rally on light volume is just short covering.
Third, can WTI hold 97?
If it breaks below that level, it means inflation expectations are falling further, and my “pullback” thesis above needs to be discounted. The Nasdaq could close up more than 1%.
One more upside catalyst not to miss: Nvidia GTC Berlin runs October 20–22, just two days from now.
Huang made a point of saying on Thursday, “This will all pass.”
Expectations ahead of an event like this usually get priced in a day early.
Finally, earnings. Meta reports this week. The market expects free cash flow of -$9.1 billion to -$10.3 billion, versus +$10.6 billion in the same period last year; capital expenditures are forecast at $40.5 billion to $41 billion, double year over year.
This is the first public defense of whether “AI capital spending can pay off.”
So tonight is just a warm-up without a referee.
The referee won’t even take the field this week—the Fed is in its blackout period ahead of the October 27–28 meeting, the government shutdown has halted operations, and official data releases have stopped too.
All the market has left to look at is earnings.
The real direction will come from CoreWeave’s premarket quote and Meta’s cash flow statement.
$NVDA
First, why do I think they’ll open higher?
The Nasdaq could open up around 1%, and the S&P 500 up 0.7%.
They’ll pull back after opening higher, but they probably won’t break down today—because the things that really needed to fall already did last week.
Three forces are pushing stocks higher
First, futures
During the Asian session, Nasdaq 100 futures were up as much as 1.3%. Based on the closing price of 29,187, that’s 380 points, not 200.
Second, Warsh
Last week at the IMF, he declined to make a prediction about October. The market cut its bets on an October rate hike from 28% to 15%, and CME now puts the odds of no change in October at 83.9%.
Third, oil
WTI fell to 97.29 this morning, and Brent to 107.65, down 2%. The trigger: Russian diesel is expected to enter the U.S. market within 15 to 20 days.
All three point in the same direction: the denominator is improving.
Keep an eye on three things tonight, in order of importance.
First, CoreWeave premarket.
It’ll tell you sooner than the 10-year Treasury whether the credit market is stabilizing.
It closed at 61.39 last Friday. If it breaks down again today, the Nasdaq’s higher open won’t last an hour.
Second, SMH’s trading volume in the first hour after the open.
After eight straight down days, short sellers have had $32 billion in unrealized gains over the past seven days.
Those gains give them a reason to cover, but also provide ammunition to add to their short positions.
A rally on strong volume would signal a reversal; a rally on light volume is just short covering.
Third, can WTI hold 97?
If it breaks below that level, it means inflation expectations are falling further, and my “pullback” thesis above needs to be discounted. The Nasdaq could close up more than 1%.
One more upside catalyst not to miss: Nvidia GTC Berlin runs October 20–22, just two days from now.
Huang made a point of saying on Thursday, “This will all pass.”
Expectations ahead of an event like this usually get priced in a day early.
Finally, earnings. Meta reports this week. The market expects free cash flow of -$9.1 billion to -$10.3 billion, versus +$10.6 billion in the same period last year; capital expenditures are forecast at $40.5 billion to $41 billion, double year over year.
This is the first public defense of whether “AI capital spending can pay off.”
So tonight is just a warm-up without a referee.
The referee won’t even take the field this week—the Fed is in its blackout period ahead of the October 27–28 meeting, the government shutdown has halted operations, and official data releases have stopped too.
All the market has left to look at is earnings.
The real direction will come from CoreWeave’s premarket quote and Meta’s cash flow statement.
$NVDA