Republic Risk: Be Careful (Insider Wednesday)

This is a tough period for markets. Fortunately, we are NOT in overbought territory. But we have the Fed Minutes and NVDA earnings ahead.

Dear  Fellow Expat:

Good morning. 

We are in the worst two-week period for seasonality since 1928. Yesterday, markets took a hit. Following the start of the year - one anchored by five tech stocks taking 90% of the Year-to-Date gains, one must wonder if profit-taking is ahead.

The Fed Minutes arrive at 2 pm today (and should kill any hope of a March rate cut). The question is whether this document will spike any hope of a cut in May or June. I don’t think they will cut until July, which could fuel a selloff that impacts utilities and real estate - then start to weigh on gold and Bitcoin.

And - NVIDIA (NVDA) - up 44% this year - reports earnings after the bell. During the conference call, I wouldn’t put it past the company to say AI 100 million times. But at some point, the music will stop for its rally. Earnings are typically the catalyst that does so. I still think they had a tremendous December-ending quarter. Whether people are willing to pay 40 times sales… that’s a different questio…