To The Moon

🐶 My take: Good economic growth does not always mean a good stock market. Sometimes, a strong economy combined with stubborn inflation is exactly what makes Wall Street nervous.

When I see the Nasdaq falling, technology stocks turning red, and ETFs such as QQQM and SPYG dropping, I want to understand one important thing:

Is the market falling because the economy is weak, or because the economy is too strong and inflation is not cooling fast enough?

These are two very different situations.

The CPI figures in the screenshot give us an important clue:

🇺🇸 U.S. October CPI — Figures shown in the screenshot

0.4%

Actual

0.3%

Forecast

0.6%

Previous

Inflation surprise

Hotter than expected

Monthly CPI came in 0.1 percentage point above expectations, although it slowed from the previous 0.6%.

This is the interesting part. Inflation is slowing compared with the previous reading, but it is not slowing as quickly as economists expected.

That difference matters enormously to investors.

1️⃣ What exactly is CPI and why does Wall Street care?

CPI stands for Consumer Price Index. It measures how much prices are increasing for everyday goods and services.

Think about the things people spend money on:

* 🏠 Housing and rent

* 🍔 Food and groceries

* ⛽ Petrol and energy

* 🚗 Transportation

* 🏥 Medical services

* 👕 Clothing

* ✈️ Travel and services

When CPI increases, it means consumers are paying more for the same basket of goods and services.

The Federal Reserve (Fed) watches inflation closely because its main objective includes keeping inflation around 2% over the longer term.

Why does this matter to investors?

Because the Fed uses interest rates as one of its main tools to control inflation.

When inflation is too high, the Fed can raise interest rates to slow down borrowing and spending.

When inflation is cooling, the Fed may have more room to lower rates.

This creates a relationship between CPI, interest rates and stock prices.

2️⃣ Why is 0.4% CPI worse than the forecast of 0.3%?

Let’s examine the numbers in the screenshot.

Measurement CPI

Previous month 0.6%

Forecast 0.3%

Actual 0.4%

At first glance, someone might say:

“Hang on! Inflation actually slowed from 0.6% to 0.4%. Isn’t that good?”

Yes, there is some improvement.

However, Wall Street does not only look at whether inflation is improving. It also looks at whether inflation is improving fast enough.

Economists expected 0.3%, but the actual number was 0.4%.

That is a negative surprise.

Even more importantly, the core CPI, which excludes food and energy, increased by 0.3%, against expectations of 0.2%.

This tells investors that inflationary pressure is not necessarily coming from petrol alone. Underlying prices are also proving sticky. Reuters +2

This is why the market is worried.

The Fed wants to see convincing evidence that inflation is moving towards its 2% target. One hotter-than-expected report makes that job more difficult.

3️⃣ The interest rate problem: Why a strong economy can hurt stocks

Here is something beginners need to understand.

Normally, we think a strong economy is good for the stock market.

Businesses earn more money, consumers spend more, companies expand and workers have jobs.

But there is another side.

If the economy remains very strong while inflation stays elevated, the Fed might decide that interest rates need to remain high or even increase further.

This is the situation investors are worried about.

Imagine two different scenarios.

Scenario A: Good economic growth, cooling inflation

Bullish

* Businesses continue growing.

* Consumers keep spending.

* Inflation gradually falls.

* Fed has more flexibility to reduce rates.

* Growth stocks can benefit from lower borrowing costs.

Scenario B: Good economic growth, hot inflation

Bearish risk

* Businesses continue growing.

* Consumers keep spending.

* Inflation remains stubborn.

* Fed may increase interest rates.

* Investors become cautious about expensive growth stocks.

We are dealing with the second concern.

Recent reporting shows that Fed Governor Christopher Waller supported a December rate increase and even discussed the possibility of a 50-basis-point increase if inflation remained particularly strong.

The market was already expecting a December increase, and the latest CPI reading reinforced that concern. However, a rate hike is not officially confirmed until the Fed makes its decision. Reuters +1

4️⃣ Why does the Nasdaq fall when interest rates rise?

This is probably the most important lesson for technology investors.

The Nasdaq contains many companies whose valuations depend heavily on future earnings growth.

Think about companies such as:

* Nvidia

* Microsoft

* Amazon

* Alphabet

* Apple

* Meta

* Broadcom

Many technology companies invest billions of dollars into artificial intelligence, cloud computing, data centres, research and development.

Their profits today are important, but investors are also paying for what they believe these companies can earn in the future.

Here is where interest rates become important.

Imagine I have two investment choices:

* Investment A pays me $100 today.

* Investment B promises to pay me $100 several years from now.

If interest rates are very low, investors may be more willing to wait for future profits.

But when interest rates rise, investors can earn more from safer investments such as Treasury securities.

Suddenly, waiting several years for uncertain technology profits becomes less attractive.

Investors may demand a lower price before buying growth stocks.

This is called valuation compression.

In simple language, even if a technology company is still growing, its share price can fall because investors are no longer willing to pay as much for its future earnings.

That is why the Nasdaq can be particularly sensitive to rising Treasury yields.

On November 10, following the October CPI report, the 10-year Treasury yield rose towards 4.93%, while the 2-year yield moved towards 4.69%.

Nasdaq 100 futures fell approximately 1.15% following the inflation report. CoinDesk +1

5️⃣ Why are QQQM and SPYG falling?

Now let’s talk about two ETFs that many investors hold.

QQQM

QQQM tracks the Nasdaq-100 Index, which contains 100 of the largest non-financial companies listed on the Nasdaq exchange.

It has significant exposure to large technology and growth companies.

SPYG

SPYG tracks the S&P 500 Growth Index.

It invests in large American companies with growth characteristics, including major technology businesses.

Why do both fall together?

Because they have overlapping exposure to large growth companies.

If investors start selling technology and growth stocks, both ETFs can experience selling pressure.

Think of QQQM as a concentrated way to own large Nasdaq companies, while SPYG gives exposure to growth companies across the broader S&P 500.

They are not identical ETFs, but their holdings overlap significantly.

Here is an important point:

Buying an ETF does not protect us from a market-wide valuation correction.

If the biggest companies inside the ETF fall, the ETF’s net asset value will also be affected.

For example:

Imagine QQQM holds a large position in a technology company.

If that company falls 5%, it can contribute to a decline in the ETF, depending on its portfolio weight.

When several large holdings fall together, the ETF can experience a meaningful decline even though the businesses themselves have not suddenly become bad companies.

This is why I do not panic just because QQQM or SPYG has a red trading day.

I want to understand whether the decline is caused by temporary market sentiment, higher interest rates or deteriorating business fundamentals.

6️⃣ Why is Grab dropping? Even after reporting good earnings!

Grab Holdings (NASDAQ: GRAB)

A Singapore-founded company operating across Southeast Asia in ride-hailing, food delivery and financial services.

This is an interesting example because Grab’s latest earnings were actually encouraging.

On November 3, Grab reported its third-quarter 2026 results.

Look at some of the numbers:

Grab Q3 2026 Result

Revenue growth +27% YoY

Revenue US$1.112 billion

Adjusted EBITDA growth +73%

Adjusted EBITDA US$237 million

Profit for the period US$18 million

Grab also raised its full-year 2026 revenue and adjusted EBITDA guidance.

It even announced that it had repurchased US$400 million worth of shares during September and October. Grab SG

So why is the share price still under pressure?

There are several things to consider.

A. Higher interest rates hurt growth companies

Grab is still a growth-oriented business. Investors are paying attention to its future profitability, expansion plans and ability to grow its financial services business.

When interest rates rise, investors may reduce the amount they are willing to pay for future earnings.

That can put pressure on Grab even when its latest earnings are positive.

B. Investors are worried about valuation

A company can report good earnings and still see its share price fall.

Why?

Because investors may already have expected those good results.

The stock market is forward-looking. It does not simply reward a company for reporting higher revenue. It asks whether the results are better than what investors had already priced in.

C. Expansion into financial services brings additional risks

Grab is growing its lending and financial services operations.

This creates opportunities, but it also introduces credit risk.

If customers cannot repay their loans, the company could face higher impairment losses.

Its planned acquisition of a majority stake in Atome Financial is another development investors need to monitor.

D. The Foodpanda Taiwan setback

Grab’s planned acquisition of Foodpanda’s Taiwan delivery business was blocked by Taiwan’s regulator in October.

This is another company-specific issue that investors have to consider when assessing Grab’s expansion strategy. MarketBeat +1

My interpretation: Grab’s decline should not automatically be blamed entirely on CPI.

The latest market data showed Grab trading around US$3.23 in premarket trading on November 10, approximately 6.1% below the previous close. That was happening alongside broader weakness in growth stocks after the inflation report. Yahoo Finance +1

The CPI shock can explain part of the selling pressure, but Grab also has its own business and valuation risks.

This is an important distinction for investors.

A good company can have a falling share price, and a falling share price does not automatically mean the business is deteriorating.

7️⃣ Why does the bond market move before the stock market?

Here is another beginner lesson.

When CPI comes out hotter than expected, bond traders immediately reassess what the Fed might do.

They ask:

* Will the Fed increase rates?

* Will interest rates stay higher for longer?

* Will inflation remain above 2%?

* Should I demand a higher return on government bonds?

When bond yields rise, investors compare those yields against the potential returns from equities.

For example, imagine a 10-year US Treasury offers a yield approaching 5%.

Some investors may decide that they do not need to take as much risk buying expensive technology shares.

They can earn an attractive return from government bonds instead.

This is called competition between bonds and equities.

It does not mean everyone will sell stocks and buy bonds. But higher yields can make expensive stocks less attractive.

The 2-year Treasury yield is particularly interesting because it is sensitive to expectations about Federal Reserve policy.

The 10-year yield also matters because it influences borrowing costs, mortgages and the valuation of future corporate earnings.

When both yields rise together, growth stocks can experience additional pressure.

8️⃣ Is this a buying opportunity or the beginning of a bigger correction?

This is where I want to be careful.

I do not want to buy simply because QQQM falls 1% or 2%.

I want to understand what is driving the decline.

There are three possible scenarios.

Scenario 1

Inflation cools in the next report

If the next CPI report shows meaningful improvement, the market could regain confidence that the Fed will eventually have room to reduce rates.

Growth stocks may recover as investors become more comfortable paying for future earnings.

Scenario 2

Inflation remains stubborn

This could mean interest rates remain elevated for longer.

Technology stocks may continue experiencing valuation pressure, even if company earnings remain reasonably strong.

Scenario 3

Inflation accelerates again

This would be the more concerning scenario.

The Fed could consider more aggressive tightening, bond yields could rise further, and investors could reduce exposure to expensive growth stocks.

The next important inflation release and the Fed’s December decision will be major catalysts.

Remember that a single CPI report does not determine the entire market direction. We need to look at several months of inflation data, employment, wages, consumer spending and bond yields.

9️⃣ What should I watch before buying QQQM and SPYG?

If I am looking to accumulate growth ETFs, I would monitor five things.

Indicator What I want to see

CPI Inflation gradually cooling

Core CPI Underlying inflation slowing

2-year Treasury Stabilising or falling

10-year Treasury No sharp upward movement

Nasdaq Stabilising after selling pressure

I would also watch the Magnificent Seven and semiconductor companies.

Why?

Because these companies have a significant influence on the performance of growth-oriented indices.

If Nvidia, Microsoft, Apple, Amazon and other large technology companies start recovering, QQQM could benefit.

But if these companies continue selling off, buying the ETF simply because it has fallen may be premature.

My strategy would be to accumulate gradually rather than put all my money into one entry.

For example, if I have US$3,000 allocated to QQQM:

Illustrative accumulation plan

US$3,000

Example allocation, not a price forecast

First entry

US$750

Second entry

US$750

Third entry

US$750

Cash reserve

US$750

Additional entries should depend on market conditions, valuation and risk tolerance. There is no guarantee that later entries will be cheaper.

This allows me to avoid committing all my capital during a period of uncertainty.

🔟 What does this mean for Singapore investors?

Although CPI is an American inflation indicator, it matters to Singapore investors because US interest rates influence global financial markets.

We need to understand that Singapore’s monetary policy is different from America’s.

The Monetary Authority of Singapore primarily manages monetary policy through the Singapore dollar exchange rate rather than setting a domestic policy interest rate in the same way as the Fed.

However, US Treasury yields still influence global borrowing costs, investment flows and currency movements.

If US yields rise:

* The US dollar may strengthen.

* Global investors may become more selective about emerging-market investments.

* Growth stocks can face valuation pressure.

* Singapore investors holding US ETFs may see their investments fluctuate in US dollar terms.

For someone holding QQQM and SPYG, I would pay attention to both the ETF’s share price and the USD/SGD exchange rate.

A falling ETF combined with a stronger US dollar can produce a different result when converted back into Singapore dollars.

1️⃣1️⃣ Why am I making this trade now?

🐶 My view is that this is a period where I need to distinguish between a healthy correction and a deterioration in the economic outlook.

The October CPI figures are uncomfortable because inflation came in above expectations.

Although headline CPI slowed from 0.6% to 0.4%, the market wanted to see 0.3%. Core CPI also remained sticky.

This creates uncertainty around the December Fed meeting.

I understand why investors are reducing exposure to expensive growth companies.

QQQM and SPYG are particularly interesting because they give me exposure to large American growth businesses.

I do not believe that one hot inflation reading automatically destroys the long-term technology investment story.

However, I also do not want to ignore interest-rate risks.

Grab is another example. Its latest revenue and adjusted EBITDA growth were impressive, but its share price remains vulnerable to market sentiment, valuation and company-specific risks.

My approach is to avoid chasing falling prices and wait for signs of stabilisation.

1️⃣2️⃣ What’s my plan from here?

Here is what I want to monitor:

* QQQM: Watch whether large technology companies stabilise and whether Nasdaq selling pressure starts easing.

* SPYG: Monitor the broader growth-stock sector rather than relying on technology stocks alone.

* Grab: Watch profitability, lending performance, acquisition developments and future guidance.

* Treasury yields: Look for signs that the 2-year and 10-year yields are stabilising.

* CPI: Look for consistent evidence that inflation is cooling.

I would consider adding gradually if valuations become more attractive and the market starts stabilising.

I would reduce my enthusiasm if inflation accelerates again, yields continue climbing or company earnings begin deteriorating.

Most importantly, I want to preserve cash for opportunities instead of trying to catch every falling knife.

🐶 Final thoughts from Options Puppy

The biggest lesson from today’s CPI report is this:

A strong economy is not always bullish for the stock market.

If the economy is growing but inflation remains high, the Federal Reserve may have to keep interest rates higher or increase them.

Higher interest rates can reduce the valuation investors are willing to pay for future earnings.

That is why the Nasdaq, QQQM and SPYG can fall together.

And Grab reminds us that even companies reporting impressive earnings can experience selling pressure when investors become cautious.

I do not need to predict every market movement.

I need to understand why the market is moving, manage my cash and wait for opportunities where the potential reward justifies the risk.

🐶 Options Puppy philosophy: Don’t fight the Fed, don’t chase the market, and don’t spend all your ammunition on the first red candle.

Reuters +3

@AI_FocusedTrader @Shernice軒嬣 2000 @Daily_Discussion @TigerStars 

Educational market commentary, not a personal recommendation to buy or sell any security.

$Invesco NASDAQ 100 ETF(QQQM)$  

$Grab Holdings(GRAB)$