even this doesn't help

The market had one job this week: celebrate Nvidia’s ridiculous, record-breaking earnings. Instead… it dumped. Hard.

Let’s walk through what actually happened.

The Setup: NVDA Crushes, Market Cheers

Nvidia reports $55B in revenue (the best in its history). The stock jumps +6%, the Nasdaq has its biggest single-day pop since mid-2025, and everything is looking like a classic “AI party is back” moment.

And then about two hours later, the entire vibe flips.
Nvidia goes from +6% to -3%, and the S&P 500 wipes out ~$2 trillion in market cap in roughly five hours.

No new headlines. No negative earnings. No macro shock.

Just… a hard U-turn.

The Only “News” — And It Wasn’t New

The market already knew:

• October & November jobs reports drop on Dec 16

• Unemployment sits at 4.4%, highest since 2021

None of this surprised anyone. So it wasn’t the trigger.

What is the trigger here?

The Real Trigger: Liquidity Tightening

This is the part often missed because it’s not as flashy as earnings.

• The NY Fed met with Wall Street last week after a big $50B repo tap

• SOFR stays elevated at ~4.05%, above the Fed funds rate

• Treasury issuance is soaking up cash

• Reserve balances are shrinking

In simple terms:
There’s less easy money floating around.

And when liquidity gets tight, markets get jumpy even when earnings are great.

Add Leverage to the Mix… and You Get Volatility

Crypto is overflowing with leverage. Almost $1B liquidated in 24 hours while BTC barely moved (-1%).

Equities aren’t far behind:

• Margin debt jumped 6.3% in September

• It’s now near a record $1.13 trillion

• The last few times margin debt spiked like this… the market didn’t end well

When markets wobble and leverage is high, small drops act like big ones.

Sentiment: Absolute Trash

Fear & Greed Index is sitting at Extreme Fear (6).

Meanwhile, S&P is still ~10% up YTD.

Welcome to markets, the vibes and the numbers rarely match.

Zoom Out

Whenever weeks like this happen, I always remind myself to step back.

Five-year view of the S&P?
Still an uptrend.

Five-year view of Bitcoin?
Still an uptrend.

Pullbacks aren’t a sign things are breaking, they’re a sign things are normal. Nothing goes straight up without taking breathers, and you wouldn’t want it to.

So What’s the Move?

All I can share is what I’m doing:

• Staying the course

• Buying the best businesses and ignoring the noise

• Keeping BTC as a long-term booster

• Holding some Gold as a steady hedge

• Not letting short-term liquidity jitters derail a long-term plan

Charlie Munger said it best:

This week was one of those routs. Chin up.

Happy Hunting!

Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.