Market Finds New Leadership As Nvidia Loses Momentum

In his Daily Market Notes report to investors, Louis Navellier wrote:

Friday’s rebound continues on the open. Investors are ready to put August behind them.

New Leadership

The market is trying to find new leadership, as tech has taken a body blow when NVIDIA (NASDAQ:NVDA) shares lost momentum in the face of stellar earnings and guidance, raising questions about the vulnerability of the rest of megatech, which has delivered 75% of the NASDAQ return this year.

Tech is down 5% in August, which is still better than the banks which are down 9%, both impacted by the steady rise in interest rates as the yield curve capitulates to the Fed’s higher for longer, with the latest estimates for a Fed cut now kicked well into 2024.

Stronger Fixed Income

The competition for investor money from fixed income is getting stronger, not only with short rates well above 5%, but longer rates are seeing more recommendations for Corporate bonds and High Yield, helped by stronger economic data. So far we’re seeing a normal seasonal pullback with light volume and tame volatility.

China is adding incremental support to its weaker-than-expected economy and is bouncing today, helping push crude oil back over $80/bbl, aided by expectations that the Saudis will push the 1MM/bbl volume cut through October.

Less Volatile Week

We get a few interesting earnings this week: Best Buy (NYSE:BBY), NOI (NYSE:NIO), and HP (NYSE:HPQ) tomorrow, Salesforce (NYSE:CRM), and Crowdstrike (NASDAQ:CRWD) on Wednesday, and Dollar General (NYSE:DG), Broadcom (NASDAQ:AVGO), and Lululemon (NASDAQ:LULU) on Thursday.

After the first two hours of trading, all the major indexes are at the high for the day, and the VIX is falling, with communication services and energy leading. We should be having noticeably less volatility this week with no Fed news expected, the NVIDIA report behind us, and a long weekend ahead.

Coffee Beans: Lucky Break

A North Carolina man went for a walk during a break from work and ended up winning a $100,000 lottery prize. Neal said his $100,000 prize will help fund a trip to St. Lucia to celebrate his 10th wedding anniversary. Source: UPI. See the full story here.