Now Its 1 Fed Rate Cut? | Nvidia Options Volatility Implied Move at Earnings | Sell in May and Go Away in Election Years? | Inflation Higher Than 1970s?
By Derek Moore
Show Summary:
Derek Moore discusses the declining probabilities for Fed interest rate cuts in 2024. Plus, how PCE Supercore did not make the case for Fed rate cuts. Later, looking at the analyst’s expectations for earnings growth within the S&P 500 Index. Finally, comments on a paper showing how using the pre-1983 methods to compute CPI Consumer Price Index show we had higher inflation than in the 1970s.
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Topics Include:
- Declining Fed Funds rate cut probabilities for 2024.
- Explaining how implied interest rates from Fed Funds futures are computed.
- The case against rate cuts seems to be buoyed by sticky US CPI Supercore measures.
- What is CPI Supercore and PCE Supercore compared to CPI Core and plain old CPI?
- Explaining how the US CPI Consumer Price Index used to compute inflation prior to 1983.
- How measuring housing inflation changed in 1983.
- Why did they change how CPI is measured to owners’ equivalent rent?
- Looking at the probabilities for rate cuts across different Fed FOMC meeting dates
- What about Sell in May and Go Away in election years?
- Explaining how to tell what the options market is implying for a 1-standard deviation move.
- Implied volatility around Nvidia earnings date scheduled for May 22nd.
- How to calculate the implied move in a stock based on the options market.
- Examining the at the money ATM straddle on Nvidia options expiring 2 days after earnings
Mentioned in this Episode
Podcast: Explaining How and Why Bonds Make or Lose Money
Jay Pestrichelli’s book Buy and Hedge
Derek’s new book on public speaking Effortless Public Speaking
Derek Moore’s book Broken Pie Chart
Contact Derek derek.moore@zegafinancial.com