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If the first two days of trading this week are any indication, today is setting up to be another day of dull market action. The market-cap weighted S&P 500 comes into today down 0.16% while the equal-weighted S&P 500 is up a whopping 0.03%.
Currently, the S&P 500 futures are down two points and are trading in-line with fair value, the Nasdaq 100 futures are down 12 points and are trading fractionally below fair value, and the Dow Jones Industrial Average futures are down 26 points and are trading fractionally below fair value.
There isn't much conviction behind the equity futures trade, yet that is not expected to be the case this time tomorrow. NVIDIA (NVDA) reports its quarterly results after the close today, and the manner in which market participants respond to those results will be a driving force for the equity futures trade Thursday morning.
There could be a lot of driving, too. According to Reuters, options pricing points to an implied move of nearly 10%, or $300 billion, in shares of NVDA after it reports. That could be an upside move or it could be a downside move. In any case, NVDA looks poised to move big after its report, and that move will precipitate a wave effect for related stocks and the broader market.
So, even if today's action seems dull, it won't be so much because participants are disinterested as it is because they are interested in what they will hear from NVIDIA and how the stock trades in response to what is heard.
A wait-and-see mentality, then, could pervade today's tape at the index level while there are some more "go get 'em" responses at the individual stock level.
In pre-market trading, participants are getting after Ambarella (AMBA) in a good way. The chip maker is up 19% after the company's earnings report. Participants are also getting after several retailers after they, too, reported earnings.
Abercrombie & Fitch (ANF) is down 9.4%; Foot Locker (FL) is down 8.6%; Nordstrom (JWN) is up 1.9%; and Kohl's (KSS) is up 3.0%.
None of these retailers missed earnings estimates, yet the overall response has been mixed, which kind of fits with an otherwise mixed view of the economic outlook. The market has been embracing the view that the economy will achieve a soft landing, but it can't fully shake the idea that a hard landing is possible.
So, when the market sees Abercrombie & Fitch raise its full-year revenue guidance, but hears the company say it continues to operate in an increasingly uncertain environment, the market allows room for future disappointment in a stock that has been on an absolute tear this year.
Re-enter NVIDIA, which is up 159% year-to-date and is set to report its quarterly results after the closing bell. It is primed to move. Everybody knows that. What they don't know is which way. So, the market is operating in a guarded fashion as it is on guard for what may come.
