KG on Consumer Sentiment Plunge, Key SPX Levels & Crude Oil’s $90 Support

jumping right now 82,000 and . Okay let's get out to Kevin Green who joins me for a look at some of the data that's just hitting the wire. Obviously, wot a read frta as to how consumers are behaving. Let's get to how they're thinking right now and their attitudes toward this economy. We've got the University of Michigan svey just hitting the tape right now. What are we seeing? Good mo Sam. Well, we are seeing the University of Michigansumer sentiment data coming in at 46.3. Street was looking for 47.5 in the previous print was 48.1. This from as fa as I can see, is actually the lowest on record when it comes to the Sentiment Sentiment indicator here. Now, if you're looking at the one year inflation expectations that actually come in at 4.7% higher than what we saw for last month at 4.6%, but lower than the Street's expectations of 4.8%. Andonsumer expectations actually had a better than expected print at 47.3. Street was looking for 45.9, and if we looking at current conditions, that went down to 44.7. Previous print was 50.9. So that's actually a pretty sizable drop on the current conditions front. So overall, not probably n best consumer sentiment print obviously in some respects, but you are seeing maybe a little bit of a deceleration when it comes to the one year inflation expens. Not seeing a big move in yields so far here and not really seeing a big reaction when it comes to the dollar. So thi last month aw a ln when it came to the market. we were kind of pricing for this dismal print. I mean, I feel like a lot of the consumer sentiment is largely priced in at tage, particularly because we've seen this divergence. I mean, you know, nly this dispersion between, you know, how consumers are thinking about things and how they are behaving, b obviously the spending seems to be holding up. Okay. I mean, as I said, heard that from Delta this morning. We'll continue to keep an eye on that. But good that perhaps some of those future expectations have come down just a tad here. What about these levels? I mean, obviously we were talking this unwind yesterday as we closed up for Thursday trade. We're seeing a nice lift this morning helped out by tech. It's helped out by by tech in some respects. ld say that if you're kind of looking at the sector performanc still kind of that broad out trade. Last time I checked tech was actually in the negative for this morning. We are still seeing some pressure on Nvidia. It haslly reversed a lot of the premarket gains. But if you're looking at the levels to the upsi800 is going to be a key area of resistance. That's exactly where we saw some resis over the last couple of trading sessions. And so that is going to be the first area that we focus on. And if we're able to break above 7820 to the upside is where we're seeing the majority of the flows that have an exposure to the downside. You're looking at 7750, a little bit higher than what we saw for yesterday when it came to the positioning. But we are seeing still VIX sitting at only at around 15 right now. So implied volatility is actually still relatively low 15. Spot one one the VIX. we're implying around less than a 1% move to the upside or dow So the market's still kind of positioned to be pulled up. there is obviously some hedging activity that could be taking place here ove the next couple of days because volatility is so low. Okay. Yeah. mean as you point out, the technology sector is still just a tadwer fo your point. But we do have some of the mag that are higher. It seems like semis are Bid this morning as far as the. ITV up 1%. But yeah, to your point, I mean we are seeing some broadening out as far as this trade is ccerned. Health care seems to be higher consumer discretionary as well. Reale. Interesting. As far as what we've heard from open AI. I mean, you know, these reports I should say, because we had a bit of a scare yesterday that very much led to a big rotation in this market. We've had fears being eased now with this Bloomberg report suggesting that, yes, they will hit the $70 billion if you're not following on with all the twists and turns of this story, I mea who's? How do we know who's right? I mean, have they even talked about the run rate open AI themselves? Because obviously we're seeing a lot of sensitivity in this market. It's clearly hit a n It has. I mean, we had this report from the FTC that open AI was approaching $50 billion at the end of September when it came to annualized revenue rate. That was below the expectations of $70 billion. But there's a little bit of a caveat to this story. There's a lot of traders and investors that are trying to compare Anthropic's financials to open AI's financials, and rightfully so. They're both competitors within this space, but they don't really measure 1 to 1 as far as how they calculate their not only their revenue aggregation, but some of the other il metrics here. So Bloomberg did a follow up story. It appear that O is on track to hit that $70 billion mark. But once again it seems like it might have been a calculation difference. And it seems like the market for the most part has tried to shrug that. It just showst OpenAI is so integrated with a lot of these bigger names, espy in memory, and s the bigger hyperscalers out there, that if they kind of se weakness that could have some downstream impacts on their own business as well. Even though if you're looking at the overall industry statistics, inference continues to ramp up to the upside.ainingp up to the upside. So the demand for compute is still high. It just kind of depends on, you know, is OpenAI able to continue to keep their market share or are they losing market share or are they able to gain market share as they IPO? I think that was the big question mark yesterday as well, causing that rotation from tech to some of the other defensive sectors out there. Yeah. And particularly as markets are trying toign some sort of multiple to this story, at least for now as well. L just talk about cde because obviously we saw it took a little bit of ap this morning. I saw that state media had reported out of Iran that the IRGC stated from now on, any vessels that commit violations outside the Strait H. How much did that move the needle? How significant is that? Is that the only driver of what we're seeing this mor I mean, we continue to see Russian refineries getting I mean, that cary coming out of Iran is something that's kind of new. Itight be more of an aggressive tone. But we have to see some through. Iran has madt of claims regarding the Strait. And yes, we have seen an uptick when itmn the Strait of Hormuz, but not as aive as maybe the rhetoric kind of suggests. So I think the market is still trying balance out some of the logistical risk that's out there. And we will see China kind of bring in refined products back into the market. They did have a little bit of a holiday. It seems like they wanted to ensure that prices were stable within their country as that holiday week did take place. So that also kind of pushed prices a little bit lower. But from a technical standpoint, this is an area of support that you would expect maybe some buyers to try to step in if they are still bullish within oil.we actually break the 200 day moving average and some of these other key moving averages here, I think that's where you kind of see this rollover. But the logistics and thendamentals, reflecting a very tight market. We'll just see how long this kind of lasts. And if we start seeing some demand destruction on the back end over the next couple of quarters here, S when it comes to GDP, not only here in the United States, which won't have as much of an impact, but when you're looking at the Asia countries, those are going to be the ones that really do reflect if oil is not getting out of the strait or not, and how much of a loss it's having to their economy, because a lot of those economies are still industrial based, driven, if you will. Yeah, absolutely. KG really appreciate it. Thanks so much