Monday was a weird session showing that the mindless dip buyers are still active... mindless in the sense that any headline reminding these people of a name will trigger a buy action based on previous falls but without much thought to the new news itself. A case in point is the Nvidia downgrade, its Q2 revenue fell to $6.7bn, down from the forecasted $8.1bn, but despite the huge miss showing a gross margins decline, the stock price rallied based on its previous 70% fall showing disregard to the context of the new announcement, the stock did declining later in the session. Time of caution is with us, I am not at all convinced that the current rally has legs, however, I need to add that 2020 and 2021 market prices were disconnected from the fundamentals and did not make much sense so, trying to predict the 2023 price moves is more art than science, we are in unchartered territory created by 2 years of monetary & economic manipulation.
After hours Monday, Novavax cut its full 2022 revenue guidance in half, quite a bold move that should make players re-access some forecasts, the stock tanked 33% in after-hours trading. It is also to be noted that many companies that have reported in Q2 gave no guidance for Q3 and Q4. I have some buy orders at below 32,400 for the DOW.
To through some political uncertainty into the mix, I draw attention to Ray Dalio's recent essay on China/US tensions over Taiwan heightened by Pelosi's visit (Unecessaty provocation), he calculates the possibility of a major conflict at high.
