RGTI, IONQ, QBTS fell as US Market crashed.
In my Mon, 06 Jan 2025 post, I have termed this week as Jobs Report week because of the 4 jobs reports that will be published one after another from Tuesday onwards.
Yesterday, Tue, 07 Jan 2025 saw the first of four (US Jobs opening & Labour turnover surveys - JOLTs) released.
And Wall Street decided to sell off stocks and bonds Tuesday after better-than-expected economic data fanned fears that inflation could remain stubbornly high in 2025.
When 4pm came around: (see above)
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DJIA : -0.42% (-178.20 to 42,528.36).
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S&P 500 : -1.11% (-66.35 to 5,909.03).
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Nasdaq : -1.89% (-375.30 to 19,489.68).
On Tuesday, traders ramped up bets that the Fed would slow its interest rate cut-plans in the coming months, if not hold off on cuts through year’s end.
Sectors Performances.
As a result of the sell off, it was a sea of Red yesterday.
Top 3 Loss sectors:
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Technology - XLK.
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Consumer discretionary - XLY.
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Communication services - XLC.
Top 2 Gain sectors.
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Energy - XLE.
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Healthcare - XLV.
I think when we look at our holdings, it has definitely taken a hit - agree ?
US jobs opening in November 2024
Jobs opening and Labour turnover surveys (JOLTs).
US Job openings rose to a 6 -month high in November 2024. (see above)
Available positions increased to 8.1 million from an upwardly revised 7.8 million in October and exceeding Wall Street expectations of 7.73 million. In fact, it is the highest level since May 2024 (8.23 million).
Advances were led mostly by job openings at professional and business services, that stands at a 2 -year high (almost), as well as finance and insurance.
At the same time, the Bureau of Labor Statistics’ JOLTs also showed that layoff activity held fairly steady in November 2024.
Job openings are a closely watched metric of how much demand there is for labour.
Despite more job openings:
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Hiring is weakening.
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Layoffs are low.
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Workers are ever more reluctant to quit their jobs.
It is a wait-and-see scenario as employers and employees alike, wait for the next administration’s policies.
Nobody is rocking the boat.
Economists have cautioned that coming weeks & months could shift the narrative for:
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The labour market.
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US inflation.
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Overall US economy.
Meanwhile, they are also paying closer attention to returning president's policy proposals about
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Trade.
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Taxes (tariffs).
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Government efficiency.
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Immigration.
ISM Services report.
Tue, 07 Jan 2025 also saw the release of US services purchasing manager index (PMI) for December 2024.
Latest ISM reading showed an increased to 54.1, up from November’s 52.1, amid strong demand.
December 2024 increased in prices is (i) fanning concerns around stubborn inflation and (ii) raising questions around 2025’s trajectory of interest rate cuts from the Fed.
Interest Cut Predictions.
According to the CME FedWatch too, markets are currently pricing in the probability of just one Fed cut in 2025, down from two rate cuts, measured in December 2024.
Worst case scenario (of course!) is no interest cut in 2025, should inflation resurfaces.
Sarmaya Partner, Chief investment officer, Wasif Latif best summed it up as:
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US market is starting to notice a problem.
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Tariffs and the growing national debt are causing concern.
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Many are wondering how Mr Trump can reduce US debt, given that if he intends to fulfill his election campaign’s promises and implement other new programs - that means spending money.
Tuesday was a sad day for quantum computing stocks like $Rigetti Computing(RGTI)$ , $IONQ Inc.(IONQ)$ and $D-Wave Quantum Inc.(QBTS)$, no thanks to $NVIDIA(NVDA)$ ‘s CEO irresponsible remarks.
His quibble that he did not believe quantum computing would be much of a factor for 10 to 15 years.
I wonder which reporter posed this question to the man when he does not qualify as a subject matter expertise when it comes to quantum computing.
Although he is very educated in the computing world, he does not really have a good grip on the timeline of how these things play out.
So why opened his ‘big’ mouth and inflict harms on his technology peers ?
Is there a remote possibility that quantum computing when executed successfully is a threat to Nvidia’s chips and relevance ?
Afterall, it is a multidisciplinary field that combines aspects of computer science, physics, and mathematics, in the same processing plane.
Nonetheless, the damage was done and RGTI share price fell by $1.20 per share.
Heading into Wed, 08 Jan 2025, RGTI is poised to fall further.
This time, it will be an even bigger cut.
I am not shorting RGTI based on a baseless CEO’s opinion, especially one that could possibly end up being a competitor.
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Do you think people with “authority” should exercise prudence when approaching subject where they are not an expertise of ?
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Do you think quantum computing stocks will continue to crash back to square one or somewhere along the fall, it will halt and turn around ?
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