The Risk in the Market Now

In partnership with

Newsletter Summary: Key Highlights

• Stock Market Surge: Investors pour $56 billion into equities as S&P 500 hits record highs, but risks of inflation and volatility remain.

• Retail Sales Update: October retail sales grew 0.4%, signaling mixed consumer spending trends as the holiday season begins.

• Nvidia Earnings Preview: Nvidia’s Q3 revenue is expected to double, driven by AI and data center demand, but high risks loom.

• Bitcoin Breaks $90K: Bitcoin surges on institutional interest and policy speculation, though hype may be driving the rally.

• US Stocks Dominate Globally: S&P 500 outpaces Europe with a 25% YTD gain, raising questions about long-term valuation gaps.

Investors Flock to Stocks Amid Market Rally

The stock market is on fire, with investors pouring nearly $56 billion into US equity funds in just one week—the second-largest weekly inflow ever recorded. Optimism is fueled by hopes for reduced taxes, relaxed regulations, and an anticipated boost to US manufacturing.

The S&P 500 has surged past 6000, a historic milestone, but not without concerns. Analysts point to shrinking equity risk premiums, with the gap between the S&P 500’s earnings yield and 10-year Treasury yields at its narrowest since 2002. Meanwhile, inflation and market volatility loom as potential threats, even as small-cap stocks, tech, and even Bitcoin see unprecedented enthusiasm. The question remains: are investors ignoring the risks in favor of rewards?

Retail Sales: A Mixed Bag for October

Retail sales posted a modest 0.4% rise in October, following a stronger-than-expected 0.8% in September. Growth was driven primarily by auto purchases, while electronics and appliances also saw gains. Yet, not all categories thrived, and the control group sales—used in GDP calculations—dipped by 0.1%.

Despite this, upward revisions to earlier months suggest that consumers are entering the holiday season with unexpected resilience. Whether this momentum can carry through the rest of the year, however, is still uncertain.

SPONSOR
How to Have More Money to Invest?

Also if you like the content here, do support our sponsor too! And one of them is Unbeatable Mortgage! Ethan and his team provides the best mortgage advice I know. Their creative solution and attention to details have helped me reduce my mortgage by more than $900! That is $900 more for my investments!

They also have a special offer for the InvestwithPete community! They will be provide a FREE LOOK at your mortgage and help you to optimise it. If your mortgage can do better, they will tell you. If you are better off staying put, they will tell you too! No strings attached.

So if you also want to lower your mortgage or need help to get the best rates out there, you can fill a form below and Unbeatable Mortgage will get in touch!

Spotlight of the Week: Nvidia Earnings Set to Shake Markets

All eyes are on Nvidia this week, with analysts forecasting a dramatic rise in Q3 revenue to $32.9 billion—almost double last year’s figure. Three major factors are driving Nvidia’s success: skyrocketing demand for AI-optimized GPUs, growth in data centers, and the popularity of its advanced networking tech.

Nvidia’s Hopper GPUs, including the H100 and H200 models, are critical to the AI boom, supporting everything from chatbots to image generators. Meanwhile, its Spectrum-X networking solutions have become essential for data-heavy cloud giants like Amazon and Google.

But challenges remain. Supply chain bottlenecks are straining Nvidia’s ability to meet demand, and the upcoming rollout of its next-gen Blackwell GPUs could weigh on margins. Furthermore, Nvidia’s lofty stock valuation, trading at 35x 2024 earnings, leaves little room for error. High rewards come with high risks: any signs of slowing demand could spook investors.

Crypto Craze: Bitcoin Smashes Records

Bitcoin recently surged past $90,000, fueled by a wave of institutional buying, inflation concerns, and hopes for pro-crypto policies under the new US administration. Speculation abounds, with traders anticipating regulatory changes and even whispers of a national Bitcoin reserve. The $100k prediction now seems within the realm of possibility.

Yet, caution is warranted. The market buzz isn’t solely about fundamentals—hype is playing a significant role. Even Dogecoin (DOGE) tripled in value following a viral campaign tied to a government efficiency joke. Investors are reminded that sentiment-driven rallies can be as fragile as they are exhilarating.

The Global Perspective: US Stocks Outpace Europe

US stocks continue to dominate global markets, with the S&P 500 up 25% this year compared to Europe’s 5% gain. Investors are paying a record premium for US equities, banking on robust economic growth and market-friendly policies.

However, Europe faces ongoing challenges, including weak economic data and concerns about potential trade tensions. While US markets are thriving, the widening valuation gap raises the question: how long can this trend last before expectations and reality collide?

✍️ Takeaways

The financial landscape is charged with opportunity and risk. From the stock market's roaring rally to Nvidia's AI-fueled growth and Bitcoin's meteoric rise, optimism reigns—but not without cautionary tales of volatility and overvaluation. As the year’s final quarter unfolds, one thing is clear: navigating these dynamic markets will require both agility and vigilance.

Sponsor: If you like the value that our newsletter presents, do visit our sponsor website to support us too!

Be part of a healthcare breakthrough.

Cizzle Biotech is evolving lung cancer detection with our patented, 95% accurate test. Our industry-leading partnerships and progress make this an important time to grow. Your support could help accelerate this life-saving science and bring it to patients worldwide.

Join the Raise

^{Read the Offering information carefully before investing. It contains details of the issuer’s business, risks, charges, expenses, and other information, which should be considered before investing. Obtain a Form C and Offering Memorandum at invest.cizzlebio.com}

Alright! This should get you ready for the markets this week!

May Your Profits Grow!

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.