I’m still trying to understand why we got that -4% day on the Nasdaq $QQQ last Friday.
The last time we had that bad of a day was April of 2025. I think the question on everyone’s mind is if that downside move was the start of something bigger or if it was a one off event.The core reasons I can see for why we had a selloff: - Jobs report was TOO good, meaning the chances of a rate cut are virtually gone if we have so many jobs because it will lead to more inflation. Good news is bad news.- SpaceX $Space Exploration Tech(SPCX.US) will require tons of liquidity so people are selling assets that have done really well to free up money.- Markets were going vertical for a month, we were bound to get some pain if we had a bad earnings and $Broadcom(AVGO.US) wasn’t bad but a lack of guidance raise was enough to be used as the excuse.- Meta $Meta Platforms(META.US) having the dilution rumor leak during the worst part of the day only made people more concerned the capex funding is entering an entirely new stage which has implications for Amazon and Microsoft as well after we saw the Google $85B dilution news. - Crypto liquidations never help and last week led to a momentum based drawdown across all of crypto which also hurt risk on parts of the equity market like tech. All of these seem to be reasonable arguments, I just wonder if they all are *enough* to begin a much broader sell off. Is the earnings growth going to continue in Q2? If it does, will the street once again give stocks the benefit of the doubt to go higher if earnings are, or if earnings slip, do stocks slip? Does Kevin Warsh actually raise rates because of a healthy labor market or does he wait it out? Does this Iran situation get resolved soon or will it continue to be the cloud lingering over the market?This week will be really important but there are many more questions than answers for if last week’s selloff could turn into a more broad based drawdown over the coming months.Source: amit
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