Reward 500 Tiger-coinsMonday: $SanDisk Corp.(SNDK)$ -8%, $NEBIUS(NBIS)$ -11%, $Lumentum(LITE)$ -9.3%, $Corning(GLW)$ -8.1% — AI photonics and storage getting hit. $NVDA$ pulled back from the $235 high to $222.32, extending lower pre-market to $220.98. Three variables are hanging over the market simultaneously this week: the Sell in May narrative is playing out, a new Fed chair just took office, and NVDA reports tomorrow night.
What is Monday's selloff telling us?
May is structurally a high-pressure month — end-of-quarter repositioning, late earnings season, summer liquidity compression. The "Sell in May" narrative tends to self-fulfill. But index-level support remains intact — Morgan Stanley just raised its 12-month SPX target to 8,300 (bull case 9,400). The selling is in high-beta names, not the broader fundamental picture.
How will market move when new Fed chair takes over?
Powell officially stepped down May 15. Kevin Walsh was sworn in, confirmed 54-45 by the Senate.
New chairs tend to run calmer-than-expected first months — they typically maintain the prior framework to avoid spooking markets. The real volatility arrives 3-6 months later as new policy frameworks begin to materially land.
Walsh's key departures from the Bernanke-Yellen-Powell playbook?
- Ending "over-communication": Scrapping 15 years of forward guidance. Risk assets will become far more sensitive to each data release and FOMC meeting
- New inflation framework: Adopting the "trimmed mean PCE" (cutting bottom 24% + top 31% of weights) — currently reads significantly below core PCE given tariff-driven commodity shocks. Builds the narrative for rate cuts
- AI productivity cover: Argues AI efficiency gains justify easing long-term — directionally market-friendly
NVDA earnings tomorrow: market pullback is waiting for a chance
$NVDA$ at $222, reporting May 20 after-hours. Latest bank targets:
Consensus Q1 revenue estimate: $80B (vs Street $78.3-78.6B, about +2% above). Citi projects FY27 AI GPU revenue $284B (+79% YoY). Goldman's FY28 EPS is 34% above Street consensus.
9 of the past 12 quarters, NVDA beat by over $1 billion.
Goldman's caveat: TSMC and SK Hynix supply chain data have already pre-loaded expectations. "The bar for outperformance is relatively high." With Walsh removing Fed certainty and Sell in May flows at work, any "sell the news" interpretation will get amplified.
How are you positioned this week?
Sell in May signals appearing, will you trim ahead of NVDA earnings?
Walsh ending forward guidance means every FOMC meeting becomes a bigger volatility event, how you're sized going into the summer?
If the beat-and-raise lands, do you think the stock rallies or "buy the rumor, sell the news"?
Comments
Adding rocket to the fuel is Kevin Warsh, the new Fed Chair. He takes the wheel at a time where the closure of the Strait of Hormuz has sent energy prices spiralling, resulting in high inflation.
Add or Trim NVIDIA? I vote ADD. Why?
3 reasons:
Blackwell & Rubin Supercycles. Jensen said that NVIDIA has locked in at least USD 1 Trillion in orders for both chips, through to end of 2027.
Big Tech Capex: Hyperscalers are accelerating their AI Capex. NVIDIA is a big beneficiary.
CUDA Moat: This platform is the global industry standard that millions of AI developers use to write code.
Best way to buy NVDA is through Dollar Cost Averaging.
@Tiger_comments @TigerStars @Tiger_SG
On the Fed side, I think the removal of forward guidance under Kevin Walsh increases uncertainty rather than reducing it. I’m staying more selective with sizing and holding some dry powder, since policy-driven volatility could rise through the summer.
For NVDA, I’m still long-term constructive but aware expectations are extremely high. Even a strong beat could see “sell the news” near term, though any pullback would likely be more of an entry opportunity if AI demand guidance stays strong.
@TigerClub @Tiger_comments @TigerStars
The appointment of a new Federal Reserve chair marks a shift from predictable forward guidance, with a Warsh-led Fed likely tolerating more volatility and reducing reliance on the Bernanke-Yellen-Powell playbook, making every economic release and FOMC meeting more market-moving
Sell in May signals are appearing, with summer trading likely choppier as liquidity weakens and positioning fades, while NVIDIA (NVDA) fundamentals remain strong from expected revenue growth and hyperscaler spending, but earnings risk hinges on elevated expectations and a post-earnings dip could provide a chance to rebuild trimmed exposure。。。
A beat-and-raise may deliver limited near-term upside as strong results are already priced in, with “buy the rumor, sell the news” remaining a credible risk
Evaluating position sizes before the closing bell requires balancing a historical "Sell in May" seasonal pattern against strong long-term artificial intelligence structural tailwinds.
Incoming Fed Chair Kevin Warsh's less-predictable policy stance alters traditional summer asset allocation.
Adopt a Tactical Defensive Stance [1]
Tighter central bank conditions require structural adjustments. Long-term U.S. Treasury yields are holding near 52-week highs (with the 10-year around 4.65% and the 30-year hovering near 5.17%). This shift makes cash equivalents and short-term debt attractive instruments for storing dry powder.
Given the current environment, a standard beat-and-raise that merely matches high expectations risks a temporary "sell the news" consolidation.