[US Market Report] November 10 | SOX +6.86%, NVIDIA falls—Interest rate anxiety remains despite sharp stock rebound
The SOX index rebounded sharply by +6.86%. However, NVIDIA fell, and the US 10-year yield rose to 4.880%.
Good morning, this is Long-term Investor @VOO.
US stocks, which were heavily sold off last week, rebounded sharply at the start of the week.
Welcoming the drop in crude oil prices, buying has spread beyond semiconductors to small-cap stocks and consumer discretionary stocks.
Stock prices have recovered. However, the causes of anxiety have not all been resolved.
Today, I will consider the background of this rebound and the problems that still remain.
📊 Market Sentiment & Key Indicators
(Stock prices, VIX, etc., as of the end of November 9, US time)
Fear & Greed Index: 32
→ Improved by 10 points from 22 on the previous business day. It has exited Extreme Fear, but is still in the Fear zone.
Put-Call Ratio: 0.93 (CPC) / 0.850 (PCC)
→ Both are the latest confirmed values. Previously, the CPC was 1.04 (as of 11/5) and the PCC was 0.936. Since the target dates for these indicators are unconfirmed, they are not directly linked to the stock rebound on the 9th.
US 10-Year Treasury Yield: 4.880%
→ Rose from 4.859%. Although stock prices rebounded, caution regarding high interest rates remains.
VIX Index: 19.93
→ Dropped significantly from 25.63. Short-term caution has eased, falling below 20.
Dollar Index (DXY): 101.6
→ Fell from 102.2. The retreat of risk-aversion sentiment is also considered a factor in the weaker dollar.
Dollar-Yen: 157.9 yen
→ Moved toward a stronger yen from 158.5 yen.
What I want to focus on are the changes in Fear & Greed and the VIX.
Sentiment has improved from last weekend’s Extreme Fear. However, the Fear & Greed index is still at 32.
The market is regaining its composure, but it has not turned to optimism.
📈 Market Movements
The NY Dow is 52,389.75 (+1,104.02) +2.15%
The S&P 500 is 7,549.94 (+173.08) +2.35%
The NASDAQ 100 is 27,907.63 (+917.63) +3.40%
The Russell 2000 is 2,840.81 (+86.71) +3.15%
The Philadelphia Semiconductor Index is 10,033.93 (+643.68) +6.86%
Last week, the SOX plummeted by -12.15% for the week.
-12.25% on November 5, +4.21% on the 6th, and +6.86% on the 9th.
Although it rebounded significantly, it has not returned to the levels seen before the sharp drop.
A feature of this rally is that buying spread across a wide range of sectors.
Nine out of the 11 S&P 500 sectors rose by more than 1%. Industrials and consumer discretionary were both up about 4%, and small-cap stocks also rose by over 3%.
Meanwhile, NVIDIA, a core AI-related stock, is falling.
Even though the semiconductor index rebounded sharply, not all AI-related stocks were bought.
It is believed that expectations for cost improvements due to lower crude oil prices and buybacks following last week’s sharp drop overlapped.
📰 Notable News and Materials
🛢 ① Crude oil in the $86 range—Inflation concerns have eased
The factor supporting this stock price rise is the decline in crude oil prices.
Caution regarding the situation in the Middle East has receded slightly, and WTI crude oil futures fell to $86.9.
Lower crude oil prices lead to reduced transportation and energy costs, which could be positive for corporate profits and household budgets.
Furthermore, if inflationary pressure weakens, caution regarding additional interest rate hikes by the Fed may also ease.
However, the probability of a rate hike at the December FOMC remains high at approximately 82%.
The fact that crude oil has fallen and the fact that the inflation problem has been solved are two different things.
The next focus is the October CPI to be announced on November 10.
🤖 ② NVIDIA falls—yet SOX is +6.86%
This combination caught my attention this time.
NVIDIA was sold off due to management uncertainty following reports of an internal investigation into CEO Jensen Huang.
Meanwhile, other semiconductor-related stocks saw buying, and the SOX rebounded sharply.
What I want to consider here is that expectations for the AI industry and the valuation of individual companies do not necessarily align.
Last week, there was caution regarding regulatory tightening after the US midterm elections and the outlook for AI capital expenditure.
This rebound does not mean those issues have been resolved.
Even if AI demand continues, investment plans could change depending on regulations and financing conditions.
Moving forward, I want to check not just stock prices, but whether there are changes in corporate capital expenditure plans and profit forecasts.
👷 ③ Anxiety over unemployment—highest level since 2020
In the New York Fed’s October Survey of Consumer Expectations, the view that the unemployment rate will rise in one year reached its highest level since April 2020.
On the other hand, inflation expectations were:
1 year ahead: 3.9% 3 years ahead: 3.3% 5 years ahead: 3.0%
which remained flat from the previous month.
In last week’s employment report, non-farm payrolls increased by 165,000, exceeding market expectations.
However, this consumer survey was conducted before that announcement.
Employment is resilient. Yet consumers are anxious about the future.
If that anxiety leads to suppressed consumption in the future, an impact on corporate profits is also possible.
Inflation and the economy. It looks like difficult decisions will continue for the Fed.
💱 Trends in foreign exchange, interest rates, and commodities
WTI Crude Oil Futures: $86.9 range
→ Down from the previous business day’s $90.4 range. This served as a factor to ease inflation concerns.
Gold: $4,147 range
→ Up from the previous business day’s $4,073 range.
Bitcoin: $74,880 range
→ Down from the previous business day’s $75,901 range.
While stock prices rebounded sharply, gold rose and Bitcoin fell.
Not all assets moved in the same direction.
💬 Impressions and Summary ~Perspective as a Long-term Investor~
What caught my attention most today was that while stock prices rebounded sharply due to lower crude oil prices, the US 10-year yield rose to 4.880%.
Last week, semiconductor stocks plummeted even though both crude oil and interest rates fell.
And this time, the SOX is up 6.86% even though interest rates rose.
Looking at this difference, I feel it is difficult to explain stock prices solely by interest rates.
I view this rebound as a movement where the excessive caution from last week has been slightly corrected.
However, caution regarding interest rate hikes will not disappear based on lower crude oil prices alone.
Furthermore, consumer anxiety regarding employment remains.
Caution toward inflation and anxiety about the economic outlook. This is a market where we need to look at both simultaneously.
Next, I am focusing on the CPI.
If price increases slow down, it may become a factor supporting the stock price rebound.
Conversely, if the persistence of inflation is confirmed, there is a possibility that this rise will be tested again.
I will continue my accumulation into the S&P 500 and NASDAQ 100.
Regarding additional investments, I intend to make decisions while watching market sentiment and changes in interest rates, rather than chasing this sharp rebound.
Rather than the result that stock prices have returned, I want to keep an eye on why they returned and whether that reason will persist.
Looking at today’s market, that is how I feel.
📩 If you found this article even slightly helpful, I would be happy if you could support me with a “Like” and a “Follow”! The US Market Report is updated every business day📅. I organize market sentiment and index movements in an easy-to-understand way from the perspective of a long-term investor.
By checking it every day, you will develop the habit of being able to “get an overview” of market trends.
👉The “US Market Report” is updated with the latest reports as they become available. Please follow the magazine so you don’t miss our daily morning market reports!
Comments are also very welcome. Please feel free to share your opinions or questions!
#USStocks #SP500 #NASDAQ #LongTermInvesting #VOO #WealthBuilding #IndexInvesting #USMarketReport #AI #Semiconductors