Investors Are Nervous, But They Aren’t Leaving

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New lows have more than doubled since Wednesday’s follow-through day, and the stocks making new highs are defensive names and Apple.

New lows have more than doubled since Wednesday’s follow-through day, and the stocks making new highs are defensive names and Apple.

After a quick drop right after the open on Friday, the indexes found some support and managed a limited recovery late in the day. Breadth improved to about 45% positive from 25% on Thursday, but there were only 75 new highs against 430 new lows. On Wednesday, when the indexes produced a follow-through day, there were 126 new highs and 180 new lows. The new-low list has more than doubled in two days.

Nvidia (NVDA) rolled over after gapping higher, and the entire chip sector was weak. This time the Invesco QQQ Trust (QQQ) lagged with a loss of 1.2%, while the iShares Russell 2000 ETF (IWM) did better with a loss of 0.3%.

Bonds sold off again, even though the producer price index came in slightly below expectations. Wholesale prices are still rising at the fastest pace in four years, and Fed officials kept up the hawkish talk. New York Fed President John Williams said inflation is “far too high,” and Boston Fed President Susan Collins said more tightening is appropriate soon.

When bonds can’t rally on a softer inflation number, it tells you the bond market is focused on the Fed rather than the data. Nearly every Fed official who has spoken this week has leaned hawkish, and the December meeting is less than four weeks off.

The other issue is the continued uncertainty about the fallout from Nvidia. Jensen Huang is gone, but nobody knows yet who will run the company or how the companies that depended on its financing will adjust. Nvidia reports on Tuesday, and the Anthropic IPO follows later in the week.

Apple (AAPL) hit a new all-time high. That is a big turnaround for a stock that was sold hard less than two weeks ago when it warned about memory costs. It doesn’t have an AI spending problem, and investors are treating it as a place to hide.

Many of the larger stocks on the new-high list were defensive names such as Johnson & Johnson (JNJ)…

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