The remarkable story of Nvidia (NVDA) is still largely unknown, even to people who own the stock, but the company and its founder, Jensen Huang, are already mythical. How long can the company levitate above the rest and carry the stock market?

Once considered a gaming chip play and then a crypto chip play, the unveiling of ChatGPT launched NVDA into the leadership role that makes the earnings release after the close the most important of the entire earnings season.

The stock market has reacted to NVDA's results in the past year and a half. 

Summer Calm

Yesterday was a combination of summer calm and earnings anxiety. Technology (XLK) led the way, but it wasn’t the names you would think, as Monolithic Power Systems (MPWR) and Analog Devices (ADI) cracked the top ten advancers list. Energy (XLE) looks vulnerable, as gobs of money have come out of those funds.

Investors want more stability, which means large companies with steady cash flow and strong balance sheets. There is also growing demand for dividend payers, as rates are on the cusp of moving lower.

Broadening Out

Yesterday, the New York Stock Exchange (NYSE) had a few more decliners than advancers, but there were significantly more new highs than lows, while volume was even higher.

Market Breadth	NYSE	NASDAQ
Advancers	1,231	1,699
Decliners	1,552	2,522
New Highs	153	98
New Lows	14	60
Up Volume	912.2 million	1.78 billion
Down Volume	1.17 billion	2.00 billion

Perhaps the most bullish chart is the NYSE accumulative advance/decline. It looks like a market that might have a tinge of resistance but is otherwise ready to keep marching higher.

Today’s Session

All the big news comes after the close and it’s not just Nvidia (NVDA).  Interestingly, CrowdStrike (CRWD) just announced a partnership with Nvidia (NVDA) ahead of its much-anticipated report, after the closing bell. Considered the best in the cyberspace business, the company’s reputation took a hit this summer.

Salesforce (CRM) is also posting results after the close.

It is interesting to be focused on AI and earnings and not seeing the irony.  We learned last night that Buy Now, Pay Later (BNPL) giant Klarna boosted its revenue per employee to $700,000 from $400,000 a year ago by reducing headcount by 27%.  The company isn’t laying off workers, but AI is doing enough heavy lifting to pause new hires.

Fun Tidbit

From my friends at Stock Trader’s Almanac, today has been the best of the week heading into Labor Day.  Considering what’s at stake after the closing bell, I hope the best day is tomorrow.

Comments

love your attempts to throw somehumor (the floating monk) into every report Alfred A Durham on 8/28/2024 8:16:13 AM

I liked the floating monk as well. It took me back to the the mid 70's during my mind expansion days, post Vietnam. I read Autobiography of a Yogi by Yogananda and A Separate Reality by Constaneda. Those were some good times. I miss those happy days. Tom Hall on 8/28/2024 7:29:50 PM

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