Risk-off sentiment fuels broad market sell-off

In this report:

• This week's data.
• Nvidia earnings.
• TradFi flight to safety & ETF flows.
• Cryptonary's take & playing the timeline.

Disclaimer Text: Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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This week's data

Thursday and Friday (today) were the days when we saw more significant data releases. Yesterday, we had GDP, Jobless Claims and PCE Prices. GDP came in at a consensus of 2.3%, which is a meaningful move down from 3.1% (the prior reading).

When looking at the price index part of GDP, we saw an uptick to 2.4%, which was above the 2.2% consensus and the 1.9% prior reading. However, this aspect was settled slightly today, with the Core PCE Price Index MoM printing 0.3%, a number that was in line with expectations.

So, inflation is somewhat sticky, or components within it are at least. However, it is at the 2 percent level. However, growth is slowing alongside this, so that's likely the biggest concern for markets currently.

This setup is potentially stagflationary (although technically, inflation isn't running away here), particularly as we expect the uncertainty in the market to be the cause for growth to slow further in the coming months.

We have also just seen that in today's data. Personal Spending came in at -0.2%, down from +0.8% just a month ago. The inflationary component can be questioned more.

Is this a front running of tariffs ie, buy up now, and therefore need to buy less in the upcoming months when tariffs are in affect? Potentially, there are some nuances around the prices component.

Personal Spending MoM:

Alongside the above, Jobless Claims ticked up for the first time since early December. We'll be tracking Jobless Claims and if this is the beginning of a new uptrend in Jobless Claims as a precursor to a more material decline in the labour market.

Initial Jobless Claims:

Nvidia earnings

On Wednesday, the market eagerly watched Nvidia's Earnings release for any signs of a slow down, and therefore another reason to sell down risk. Numbers wise, it was good Earnings call. Nvidia reported record quarterly revenue and yearly revenue. However, despite projecting continued growth into 2026, Nvidia is expecting growth to slow.

Following the Earnings release, the share price bounced slightly, but Thursday's session saw Nvidia pull back to new local stock price lows, as the general market risked-off.

So, even on a relatively positive Earnings release, Nvidia couldn't go higher, let alone lift the entire market higher, and it actually probably helped push the wider market (Big Tech and the Index) lower.

This doesn't suggest a poor outlook going forward for Nvidia or Big Tech (which has been correlated...