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Briefing.com Summary:
*The gain in NVIDIA, and some other stocks, has more than offset losses in several blue-chip stocks.
*A buy-the-dip mindset persists because the market hasn't seen a fundamental flaw in its rosy outlook.
*Mega-cap earnings reports later this week will move the market.
The S&P 500 and Nasdaq Composite eked out record finishes yesterday, and they have been fighting this morning to retain that posture. They have some punch, too, with the force of gains in NVIDIA (NVDA), lower Treasury yields, and an awareness that the market has been impervious to material pullback action.
Currently, the S&P 500 futures are up 12 points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 94 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 10 points and are trading fractionally above fair value.
This positive disposition has taken root despite losses in UnitedHealth (UNH), UPS (UPS), Whirlpool (WHR), Royal Caribbean (RCL), Nucor (NUE), and Merck (MRK) following their earnings reports. Other notable laggards include Spotify (SPOT) and Novo-Nordisk (NVO), which disappointed investors with their results and/or guidance.
Their losses are nothing NVIDIA and some others can't cover. Collectively, the market cap of the stocks named above is $1.15 trillion. NVIDIA, which sports a market cap of $4.36 trillion, is up 1.3% in pre-market trading following a Bloomberg report that it has placed an order for 300,000 H20 chips with Taiwan Semiconductor (TSMC).
Now, add Boeing (BA), Procter & Gamble (PG), and Corning (GLW) to the mix of stocks trading higher after their earnings reports, sprinkle in a 10-yr note yield that is down four basis points to 4.38%, and the positive disposition of the equity futures market becomes a little easier to understand.
The question is, how far will the market take things today? Yesterday featured the U.S.-EU trade deal news, yet the market didn't get far with that good (but not entirely unexpected) news.
Notably, there was a Truth Social post from the president last night in which he said that he is not seeking (emphasis our own) a summit with Chinese President Xi, as the press has reported, and that he may go to China but only at the invitation of President Xi, which has been extended.
There is potential in that clarification for the market to think the U.S.-China trade discussions being held in Sweden right now have hit a wall of some kind, but the market is not rushing to such judgment.
If anything, it is reserving judgment on those discussions, the discussions being held by the FOMC, and the discussions that will be had following the earnings reports later this week from Meta Platforms (META), Microsoft (MSFT), Amazon.com (AMZN), and Apple (AAPL).
The market, to this point, has demonstrated that it has ample buying reserves in its tank. It continues to operate with a buy-the-dip mentality because it has yet to identify a disarming fundamental flaw in its rosy outlook.
