Advisor Login Contact Us

A Relatively Quiet Day; Nvidia Announces at The Close

Nvidia announces earnings at the close today.  The “Magnificent Seven” are 2 and 4 for the reporting season, defined as two companies exceeded expectations while four disappointed.  It could be argued the immediate direction of the indices could be dictated by the announcement.  Expectations are high the company will outperform, but the question is by how much and is such already discounted?

Equites were bifurcated as the tech dominated NASDAQ declined about 1.0% while the Dow dropped about 0.15%.

Shorter dated Treasuries rallied causing the curve to modestly steepen, the catalyst for the advance was perhaps the belief that the selloff went too far too fast.

An argument can also be made that the markets will be flat to nominally lower until the next data deluge that will commence in about 8 trading days.  There is a dearth of both corporate and economic announcements to base investment decisions upon.  Today’s release of the Minutes from the last month’s FOMC meeting should be a nonevent given the plethora of Fed speakers. 

Last night the foreign markets were mixed.  London was down 0.84%, Paris up 0.16% and Frankfurt up 0.42%.  China was up 0.97%, Japan down 0.26% and Hang Seng up 1.57%.

Dow and NASDAQ futures are down 0.10% and 0.60%, respectively on worries as whether Nvidia can deliver blockbuster earnings to support its parabolic move in its stock price.

Many years ago, the 90-90 rule was explained to me by a noted technical analyst at that time (it was around 1992).  He stated there is a 90% chance that a company will retrace 90% of a parabolic move but the question to ask is when such a “correction” would take place.  Does this rule apply today or has the environment changed too radically?   

Return To Index Page
Kent Engelke

Chief Economic Strategist Managing Director

The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. This material is being provided for informational purposes only. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. If you would like to unsubscribe from this e-mail distribution, please reply to this e-mail and indicate that you wish to unsubscribe in your response.