It was NVIDIA’s (NVDA) market yesterday and everything else was along for the ride. The fortunate thing for the market is that NVIDIA showed unrelenting strength throughout the session, closing with a 16.4% gain that left it near its highs for the day.
Remarkably, as noted in various press reports, the market cap gain for NVIDIA on Thursday was greater than the entire market cap for companies like Bank of America (BAC), Caterpillar (CAT), and McDonald’s (MCD).Â
To say the least, NVIDIA injected a feel-good vibe that stirred a fear-of-missing out vibe that underpinned the market and generated a speculative rush in other stocks like Super Micro Computer (SMCI), which soared as much as 37% intraday.Â
Now, there is a calm over the market. It’s not the calm after a bad storm. Rather, it is the calm after a sunshine storm on AI stocks, semiconductor stocks, and other growth stocks.
Yesterday’s gains were material in many instances, so there is an understandable desire to wait and see if there will be follow-through buying efforts or if these stocks, and the broader market, will be subjected to a consolidation trade. NVIDIA for its part, though, is up another 2% in pre-market action.
Currently, the S&P 500 futures are up nine points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 24 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 64 points and are trading 0.2% above fair value.
There are some individual movers of note following earnings reports. Carvana (CVNA) is a headliner, surging 25% after posting its first ever annual profit and forecasting Q1 adjusted EBITDA significantly above $100 million. Square (SQ) is another big gainer, up 16% on a favorable gross profit performance and outlook.
Booking Holdings (BKNG), up 43% from its late-October low, is down 7% after a better-than-expected report and guidance that allegedly didn’t live up to higher expectations. Intuit (INTU) is down 0.6% after beating earnings estimates and issuing below-consensus fiscal Q3 guidance that was offset to an extent by a reaffirmation of its full-year EPS guidance range.
We’ll call the overall earnings response “mixed” then and another basis for the lackluster conviction in the futures trade.
Treasury yields have moved off their overnight highs, seen in the wake of FOMC voter Fed Governor Waller’s view that there is no rush to cut rates anytime soon, and are now little changed from yesterday’s settlement. The 2-yr note yield is down one basis point to 4.71% and the 10-yr note yield is unchanged at 4.33%.
There isn’t any economic data of note today, so there will be no direct influence there for the stock market’s yet-to-be-determined performance.
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Originally Posted February 23, 2024 – Calm after NVIDIA’s sunshine storm
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