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The NASDAQ Surged Over 3%

The NASDAQ surged over 3% on NVDA’s strong earnings reports and forward-looking guidance.  According to Bloomberg NVDA added about $277 billion to its market capitalization, the biggest single session increase in value ever, eclipsing the $197 billion gain made by Meta.

NVDA has increased in value by over $720 billion this year with its valuation now topping $1.96 trillion.  Shares are up 59% this year and is the fourth most valuable company, behind only those of MSFT, AAPL and Said Aramco according to Bloomberg.

Because of the huge surge in NVDA, the PE ratio for the NASDAQ 100 has only been higher at the apex of the dot.com bubble of 2000.

Equities were also energized by stronger than expected economic data.  Initial application for unemployment benefits fell to the lowest in a month last week as the decrease in claims exceeded all estimates.  Claims are around lows for the cycle with some questioning the validity of the data given the layoffs occurring at many companies.

Moreover, US manufacturing activity expanded at the fastest pace since September 2022 as inventory reduction appears to have become less widespread.

Treasuries were essentially unchanged on the data and hawkish Fed speak.         

What will happen today?

Last night the foreign markets were up.  London was up 0.05%, Paris up 0.55% and Frankfurt up 0.06%.  China was up 0.55%, Japan up 2.19% and Hang Seng down 0.10%.

Futures are flat with many questioning the sustainability of yesterday’s massive rally in NVDA. Geiger Capital writes“the last time the Nasdaq 100 made a new all-time high on a day it gained 3%+ was 3/22/2000.  The Nasdaq and The Great US Stock Bubble peaked on 3/24/2000.”

Bloomberg writes yesterday’s 2.1% NVDA fueled gain in the S & P 500 came as less than 60% of the stocks on the NYSE advanced.  The mismatch was seen just three other times in the past 60 years—1987, 2008 and 2020.

The 10-year is off 3/32 to yield 4.34%.

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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.