Nvidia Told To Not Ship Certain Advanced Chips To China

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In his Daily Market Notes report to investors, Louis Navellier wrote:

Negative History

The market is still looking for buyers as we enter a historically tough month.

Stocks ended August with a sharp drop right before the close and opened in the red this morning. Volumes remain low and the VIX continues to grind higher. Chartists are making the observation that September is historically the weakest month of the year on average since 1950, but clearly, this is no average year.

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September also has a history of amplifying the trend going into the month, in either direction, and this year it is clearly negative. Beyond that, the charts say that when the market drops 3% or more and doesn't bounce within 2 days, it's most often noticeably lower in the weeks ahead.

While all this technical history is quite negative, at the same time it's already on the table and reflected in what we're seeing. Bearish sentiment is very high at the moment and that is more often than not looked back upon as a buying opportunity.

News of the day includes crude oil falling below $87, near the low for the year on concerns about slack demand and rising supply, yet natural gas is higher, close to the high for the year, due to the shortage in Europe thanks to trouble created by Russian deliveries.

We're also seeing weakness in industrial metals on recession concerns. Covid is still with us; China is locking down Chengdu, a city of 21 million, under their zero-tolerance policy.

No Semiconductors To China

In other China news, NVIDIA (NASDAQ:NVDA) announced that they have been told to not ship certain advanced chips to China by the US government due to concerns they may be utilized by the Chinese military, pushing the shares down 8% to a price it hasn't seen since 2020 and is dragging down the rest of the semiconductor names.

The 2-year US Treasury yield is at 3.52%, a level it hasn't been at since 2007 and the 10-year is now at 3.27%, up 14bps on the day, a level it hasn't been at since 2017.

The market is clearly now expecting the Fed to add 75bps to Fed Funds this month.The higher rates will continue to put pressure on stocks with elevated P/Es and won't help demand or profit margins.

It's not time to buy the dip yet but when the turn comes, it is likely to be very strong.Have your list of solid earners to add to at the ready.

Coffee Beans

A tomato spill makes a major highway a marinara mess. A truck hauling a load of tomatoes crashed Monday after a collision near Vacaville, California, and its load spilled across several lanes of Highway 80 in Northern California. Crews had cleaned the eastbound lanes but one westbound lane remained closed six hours after the crash. Source: NPR. See the full story here.