Equity Sell-Off Continues Ahead of Friday's CPI Print

0:00Welcome to Risk Reversals Market Matrix, your AI-generated podcast curated by Guy Adami and Dan Nathan, breaking down the day's most impactful stock market and business headlines. I'm your host Brunson, and all of today's market data is provided by FACTSAT. As a reminder, be sure to subscribe to Risk Reversals' daily markets newsletter. That's at riskreversal.substach.com. Now to the news, it's Thursday, September 10th, and these are them. Stocks fell again Thursday, as the combination of persistent inflation, surging oil prices, and another spike in treasury yields continues to take a toll. The selling inequities this week has been fairly orderly thus far, with the SPX lower by about 1.3% into tomorrow's CPI. Stocks dropped Thursday after US oil prices topped $100 a barrel, amid growing fears of higher inflation from a prolonged war in the Middle East, the jump in oil prices pushed the 10-year treasury yield to 4.95%.

1:02The highest level since November 2023. As CNBC notes, a tame wholesale inflation report failed to lay fears coalescing around higher rates and oil prices. August producer price index rose a seasonally adjusted 0.4% for the month. Inline with consensus. On an annual basis, that puts PPI at 5.4%. Well above the Fed's 2% inflation target, the report comes ahead of the closely watched consumer price index on Friday. As Bloomberg notes, Saudi Arabia informed OPEC that its crude production dropped to its lowest level in over three decades following voluntary supply cuts aimed at stabilizing global oil markets. The sharp decline in output underscores Reod's commitment to supporting prices, despite growing competition and mixed demand signals from major global economies. Stanley Druckenmiller, a close ally of Federal Reserve Chair Kevin Worsh, told a private Wall Street audience that US borrowing costs remained a little low, and central bankers

2:03who thought monetary policy was restrictive were, quote, ridiculous. The macro hedge fund manager, a longtime mentor of Treasury Secretary Scott Besent and Worsh, said in a closed-door meeting on Thursday that rate cuts are no longer needed. Committee members on the Fed, who keep saying Fed funds rates are restrictive, are just ridiculous. He told a packed crowd of hundreds of Wall Street investors on Thursday morning at a conference hosted by Piper Sandler in New York, according to a transcript seen by the FT and multiple people. As Bloomberg reports, Nvidia Chief Executive Officer Jensen Huang highlighted cybersecurity as the next major growth frontier for artificial intelligence hardware and software deployment. Huang argued that enterprise networks require continuous real-time AI monitoring to defend against automated cyber threats, opening up a massive new enterprise market for high-performance computing clusters. As reported by the Wall Street Journal, leading Chinese technology companies are facing allegations of secretly routing millions of user requests to American AI models to power

3:07their own platforms. Industry researchers warn that this reliance on foreign back-end infrastructure highlights the persistent capabilities gap between domestic Chinese AI offerings and cutting-edge Western models. For tomorrow, the CPI before the open, which could provide the final major input ahead of next week's FOMC meeting. A hot number might tie the Fed's hands to begin hiking, but a cool number could leave the meeting as a toss-up. Current odds for a hike are about 70%. That's your risk-reversal market matrix. Be sure to follow us to get alerts on new episodes every day. All of the articles mentioned on today's podcast can be found in the show description. For Guy Adamie and Dan Nathan's market analysis on these topics and more, watch Market Call on Risk-Rversals YouTube channel Monday through Thursday. Special thanks to our data provider FACSET for supporting our coverage. Story Curation by Risk-Rversal, Scripts by AI, Voice by 11 Labs. I'm Brunson. Thanks for listening.