Yesterday’s session began with worries about a deepening war between Ukraine and Russia but ended with a market ‘General’ taking charge.

The popular guessing game about the demise of the “Mag Seven” never seems to go out of style, even though it tells the story of the nascent start of the Fourth Industrial Revolution.  

Sector Performance & Heat Map

Six sectors finished higher during the session, led by Technology (XLK), Communication Services (XLC), and Utilities (XLU), which have become de facto Artificial Intelligence (AI) chip plays.

There are lots of tiny red boxes that bring up a concern. The celebrated broadening of the rally has gone in reverse.

Where are the Troops?

There was all the action in the NASDAQ Composite and gains in the S&P 600, but the midcaps and the S&P 500 saw an anemic market breadth.

Watching the Parade Go By

It wasn’t long ago that most bullish market strategists cited the broadening of the rally as a reason for optimism. We know the market can go long and far with as few as seven stocks doing all the heavy lifting, but I would prefer broader participation.

NVIDIA at the Bat

Semiconductor stocks have been in freefall, and Technology has lost its oomph. The stage is set for the heroics from Nvidia’s CEO Jensen Huang. Unlike ‘Casey’ in the famous baseball poem, not everyone agrees to hit a home run. In fact, it's even money the company will whiff on the fourth-quarter guidance.

Juggernaut

The company is a juggernaut, and any misfortune in the report will have nothing to do with demand and everything to do with supply chains or temporary technical issues.

There could be disappointment in Mudsville, but keep your eye on the longer-term trends. 

Today’s Session

While we await results from NVIDIA (NVDA) there are other things happening in the stock market.

Earnings Season Continues

On the earnings front, Target (TGT) laid a huge egg and missed big time on the top and bottom lines.

This further brings into focus that gains at Walmart (WMT) are not a reflection of a strong consumer, but of great execution at the largest box retailer.

While middle income households flock to Walmart (WMT), it looks like rich folks are back at Willaim Sonoma (WSM). Just in time for their amazing Christmas catalog.

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