Nvidia Extends Friday Slump, Fmr. Pres. Trump on TikTok Ban and Facebook, Bitcoin Hits $72K 3/11/24

David Faber (0:00)

Market Insight and Analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:06)

Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Mike Santoli, a Post 9 of the New York Stock Exchange. Cramer has the morning off. Pre-market is extending the weakness from Friday's downside reversal calendar packed this week with CPI, retail sales, UMICH and earnings from Oracle, Lennar, Adobe and others. Our roadmap begins with that big week ahead for investors. We'll get the latest inflation read on deck tomorrow.

As we said, Lennar, even dollar stores earnings on tap.

David Faber (0:31)

And not so invincible in video, the chip giant notching its biggest stock reversal in nearly seven years. And its biggest single day percentage decline since last May.

Plus targeting TikTok. There's a bill that's moving through Congress pretty quickly that could ban the social media platform in the United States. President Biden says if in fact it passes Congress, he'll sign it.

Carl Quintanilla (0:56)

Let's begin with what will be a very busy week for the markets. Ended Friday with a losing week for the S&P. Haven't done that only a few times this year, although didn't stop your former employer from some pretty bullish covers.

Mike Santoli (1:09)

That is true at Barron's. A third down week in 19 or something like that since the late October low.

So in the grand scheme of things, it looks like a hiccup on the charts. I do think the nature of the decline, though you mentioned the reversal in Nvidia. And the fact that we had a almost made to order jobs number, and everything was filling in the blanks of the ideal soft landing scenario on the market, didn't exactly shrug, but it wasn't able to capitalize on it. So I think it really highlights a couple of the things that people have been suggesting would be tests for this market, which is it's become a bit over reliant on pure momentum in certain segments, meaning those types of stocks that have been doing well, that are at the highest upside velocity have been performing the best. Nvidia is like number one in there, but it's part of every sector.

I keep pointing out Lillian Healthcare, Costco and Consumer, and that sort of had a bit of a gut check. And so it's a flow issue. It's not a fundamental issue in this instance. And I think that it just raises the possibility that you'd see this little bit of an unwind of the trades that have been overplayed. And we don't know if it's going to continue. Nvidia is indicated a little bit down today, down a hundred bucks off the high on kind of massive volume, but no news. And that's always the way we see it.

David Faber (2:25)

Mike, you know, on Friday, I was looking back at my notes from a conversation with a fairly large investor. He was talking about momentum exposures off the charts.

And we talked about this a bit on Friday. And market ahead of itself, just again, looking at some of these notes, you can be a huge believer in the power of generative AI, but that doesn't change that fact. So when it comes to momentum in particular and this name, which you could make an argument is the most important single name in the stock market right now, I don't know, does a day like yesterday have a significant impact in terms of that momentum overall?

Mike Santoli (2:58)

It does in the sense that it sort of tests exactly what's behind the momentum.

So no, it does. I think we should be clear that momentum is not just like, oh, you look at it, you know, when you see it.

It's a statistical factor. It is the degree of leadership and outperformance over a period of time. And then you have people who decide if that's going to persist, you're buying the highest momentum and you're underweighting or shorting the lowest momentum. And that's why we've had the divergence within Magnificent 7, right? You've managed to have Apple and Alphabet are anti-momentum right now, and they've suffered, you know, because of it. So it's not gonna be the whole story of the market this year, I think, but it does kind of touch a raw nerve, which is just exactly how aggressive are people gonna be in discounting the same really good long-term secular growth story every day through higher prices.

Carl Quintanilla (3:49)

Yeah, we're obviously on watch next week for GTC, Jensen Wong's keynote on the 18th. At the same time, Mike, we end up with journal headlines like the one today, stronger US growth prompting investors to scoop up a broader set of stocks. And we talked about the Goldman desk note last week about industrials and healthcare here today.