- 2 years ago
Matthew Maley, founder of The Maley Report, has over 25 years of experience on two of the most important institutional trading desks on Wall Street, Salomon Brothers and Merrill Lynch, where he covered some of Wall Street's biggest money managers. Mr. Maley uses a combination of macro, fundamental, and technical indicators to consistently make important calls at key inflection points in the markets. These include calling the top of the stock market in February of 2020, the bottom in March 2020, and the bottom in late 2018, just to name a few.
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00:00 As far as the market, looks like we're getting a little bit beat up here.
00:03 I know we drifted a little bit higher here in the pre-market, but we've really kind of come in.
00:07 I want to ask you about what you think about the market, just to kind of set the table here.
00:11 I want to ask you about what you think about the market, what you think about that NVIDIA news that we got this morning, if you've digested it yet.
00:18 No, I think that, you know, it's not surprising to me it's come back in a little bit.
00:21 Some of the markets rally, obviously seen a nice bounce here.
00:24 We got the big number coming out on Wednesday.
00:26 We also have some numbers out of the retailers this week and guidance out of the retailers.
00:32 And there's some more cracks starting to show up in the consumers.
00:35 So people are going to say, hey, are we going to get some confirmation that these cracks are really starting to grow?
00:40 But the big thing is going to be the CPI number.
00:43 On Wednesday, we might not like the fact that one number has a big impact on the market, but it does.
00:48 I mean, this may have to be reality.
00:50 And the fact the market has been bouncing into this number wouldn't surprise me if we pull back just a little bit.
00:55 You know, as some people get a little bit nervous in front of that number after these big gains and take a few chips off the table.
01:02 Yeah. And I mean, it looks like we're kind of running up to the all time highs here.
01:06 I got I'm still in a down. I'm still in the bearish camp, I guess you would you you could say.
01:12 I'm waiting to see if that breaks before I change anything.
01:15 I think we might put in another top right around those highs and move back down.
01:19 And that's and that will be very, very important, because if we do blow through, this is a critical week.
01:24 I mean, you say every week's a critical week. Well, if we break above those highs, it is in a meaningful way, not just a little way, a meaningful way.
01:31 It's going to run. OK, but if it doesn't, like you say, another top here, that's a double top, double.
01:37 What happened in 2000? What happened in 2007? Double top.
01:40 You do not want to see double tops. So I'm definitely leaning towards your side of the equation, that this is even though, you know, I don't know what's going to happen the next two days.
01:48 Kind of quiet, but we could have some real a lot of action later this week.
01:52 Yeah. And just to be clear about that level that we're talking about, one of the things that I look at to consider that level broken is multiple closes above that level.
02:02 If the if the spike trades above that intraday and comes right back in to me, that's not it yet.
02:07 I want to see multiple closes above that level before that invalidates.
02:12 All right. 13, you had something that you wanted to ask regarding China.
02:16 Yeah. So, Matt, there's going to be starting this week, they're going to have one hundred and thirty eight billion in bonds are trying to sell.
02:25 I believe that extends all the way through most of the rest of the year until November.
02:28 I was curious if you had any take on that. How do you think this can impact financial markets globally?
02:33 Well, I mean, you know, supply is becoming obviously a very, very, very important issue.
02:38 I mean, it's kind of weird because one on the one hand, the supply is so big here in the US that they're like, well,
02:44 we've got to keep rates low because we can't afford for them to go up because it'll cost us too much money to keep issuing all that debt at high at high levels.
02:51 China has that same same issue. The other thing I guess, you know, they can obviously manipulate their markets in a big way, but there's only so much we can do it.
03:02 They can do it. They still have to rely on the global on the global marketplace and what global investors are going to do.
03:08 And so this supply, I think, is going to create problems here for the stock, for their markets overall and for the global the global marketplace.
03:16 And I guess I would say point out, too, is that there's a lot of reasons a lot of people really bullish on the China stock market.
03:22 But if you look at the FX side, the high, the big cap ETF in China, that thing's getting a very, very overbought on its RSI chart.
03:31 Coming back a little bit now, I think it's on a technical level.
03:34 I'm concerned about that market. And then with this new supply coming to the marketplace in the in the fixed income area, that's going to create some more headwinds as well.
03:43 So I it's definitely something that I'm I'm worried about.
03:48 And I think people have too much confidence in that China can can just manipulate their markets any way they want to.
03:55 The markets are still bigger than any government, any government, even in or any central bank.
04:01 And my concern with this is that, well, they haven't been able to get, you know, the solar batteries or EVs, the heavily subsidized industries that they're trying to export to different parts of the world.
04:11 That hasn't worked out. So they're trying to raise more money to subsidize their next endeavor, which is going to be chips.
04:18 And I think that's one of the reasons why we're not where we're seeing them stop buying Nvidia.
04:23 They kind of want to take the reins themselves and they want to start flooding cheap Chinese chips into the market.
04:28 And I think that's one of the reasons why they're raising money is to help subsidize that.
04:32 That's just my speculation. I don't know if that's something you think, too.
04:35 And they still need money because of these these these real estate companies.
04:40 Yeah. I mean, last week they were out there saying we could there's no way we're going to make our we're going to make people whole.
04:47 You know, look to the government. Where the government where's the government going to get that money?
04:51 That's another that's another issue. But you make a very, very, very good point.
04:54 And, you know, Nvidia, you know, last May Nvidia reported great numbers and great guidance is all going to be about guidance.
05:00 But they also reported some real good numbers in August. And that didn't go so well for the stock.
05:06 If this if this issue has a negative impact on Nvidia and on the chip sector, there's no there's no more important leadership group than the than the chip stocks.
05:16 That was the case for several decades and even obviously even more so in the last year or so.
05:21 So we could be seeing probably a little bit of shakiness in the semis market going forward here, especially with Nvidia coming up, their earnings coming up next week.
05:28 Exactly. And we have this situation where the technology stocks are so people can sit there and say, oh, well, don't worry,
05:35 they'll rotate out of the tech stocks and into other areas of the market.
05:38 And that does work if the tech stocks are just kind of going down a little bit.
05:43 But they're way over still way overweighted. And if they start getting hit hard, they're 50, whatever, 57 percent of the NASDAQ 100 and 30 percent.
05:53 Forget about the Mag 7, all the tech stocks, 57 percent of the of the NASDAQ 100, 30 percent of the S&P 500.
06:01 If they start going down, the whole market starts going down.
06:04 If the whole market starts going down, people forget about rotation and they go, they sell and go into cash, especially with cash paying 5 percent.
06:11 So this whole thing that you're talking about could have a big impact on the overall stock market at a time where like what Brian talked about could be forming a double top.
06:22 So we got investors need to stay incredibly nimble right here and be very, very careful.
06:29 Thank you for that. Yeah, really, really good stuff, Matt.
06:32 So NVIDIA, this is trading lower here. It's doing its best to try and recapture 900.
06:37 One of the other one of the other stocks that I took a look at here was TSM.
06:41 TSM is is just down about a percent here today. So NVIDIA looks to be taking a little bit more on the chin.
06:48 Matt, any parting words, words of wisdom for the rest of this week?
06:52 Well, I just the one thing. Well, again, keep it stay nimble.
06:56 If you're in the options market, look at strangles because it could go either way. And so you can look at especially some index on the indexes.
07:05 But the other thing to mention, of course, is this whole thing with natural gas.
07:10 I mean, everybody's saying, what's the next AI play? Well, we all know about the what's going on with the elect, you know, the utility stocks.
07:17 The XLU is very, very old. Be careful about that.
07:20 But the natural gas stocks are not OK. And natural gas, the commodity is starting to break out.
07:26 It's got clobbered for a while, built a nice base for the last two months, now starting to break out to the upside.
07:32 So stocks like Chenier and Chesapeake, the old Apache, which is now APA Corp.
07:40 Some of these names that have a lot of exposure to natural gas should do very well.
07:44 And I don't know that they're going to skyrocket like some of the utilities have, but it's more than it's more than just an AI play.
07:51 And it's very, very oversold. So take a good look at that, because there's going to be a lot of volatility in the marketplace.
07:57 This is one group that could really surprise people.