The Trading Week Begins ... Tonight

Tonight's the night! Does anything that happens before the closing bell matter today? Did Tuesday's trade or even Monday and Tuesday in the aggregate as one matter? The answer is not really. Trading counts, that's for sure.

However, as evidenced by the lack of trading volume, for investors and for a lot of traders as well, this evening is this week's edition of "The Event You've Been Waiting For." Yes, I know the ebbing market activity could also be attributed to the fact that this is the last true vacation week of summer and Labor Day looms on Monday. That said, something tells me that trade will liven up later on, and probably explode overnight into Thursday.

So... let's get this party started, shall we?

Two Bells to Go

That's how many we still have to hear. A couple of Fed speakers today. Almost no macro news. After that second bell, when most traders unwind after a stressful day, the intensity will only be starting to heat up on this day. The main event will obviously be Nvidia's NVDA earnings release. With the market reception of Nvidia likely to decide the fortunes for the tech sector and the broader equity market at large, as those results, any new guidance issued, and the Jensen Huang conference call become the center of the financial and commercial worlds.

Adjacent to Nvidia earnings, traders will also be focused on a few other headline level names such as CrowdStrike Holdings CRWD, Salesforce CRM, HP HPQ, and Okta OKTA. Just as obvious as Nvidia stands above these four, CrowdStrike and Salesforce stand above the other two. Salesforce is looking for a bounce-back quarter after a very rough earnings reception back in late May.

CrowdStrike will not only be reporting quarterly results, but investors will be focused on what the company says about the impact on its business by the global outage created in July. Those issues originated with a CrowdStrike Falcon update for Windows hosts that impacted many Microsoft MSFT customers, as well. As I have told readers, I was fortunate enough to carve my CRWD long position in half well ahead of that event because in terms of weighting, CRWD has become too large a percentage of my holdings for any one stock.

The other side of that token is that I held onto half of that position at the time and had started to rebuild that long close to the lows. CrowdStrike is still, in my opinion, a "best in class" cyber-security provider and is back up to being my fourth largest long side exposure. Nvidia, is currently my eighth largest. Of the other names mentioned above, I am not currently in Salesforce (no promises about later) and Microsoft is still No. 2 on my pad.

Am I overly exposed going into this evening? Possibly, but I don't think so; my cash levels are up, and I am long more T-Bills, more real estate (in real estate investment trusts and actual land), more utilities (in exchange-traded funds and stock) and more gold than I ever have been. My long gold trade includes the physical as well as two ETFs... the SPDR Gold Shares GLD and Goldman Sachs Physical Gold AAAU.

As For Nvidia...

Wall Street is said to be looking for an adjusted earnings per share of $0.65 on revenue of $28.7 billion. Those numbers would be good enough for earnings growth of 139% on revenue growth of 113%. As incredible as growth like that seems, this would represent a significant deceleration from 400-plus percent earnings growth and 200-plus percent revenue growth by Nvidia over the past year or so. Whisper numbers for the adjusted EPS print are supposedly in the $0.70 or more range. There are other whispers that have the revenue print approaching $30 billion.

Of course, Nvidia faces some challenges. It's always tough to stay on top when you have a big lead in any industry or even in sports for that matter. In the call, Jensen Huang will have to address the delay in the release of the latest, most capable chips on the Blackwell architecture. Investors are going to want to know when these chips will be ready and what the ramp up into those sales will look like. In the meantime, Huang needs to demonstrate that demand for currently available chips remains robust. That will impact current quarter guidance, where consensus is already for earnings and revenue growth of roughly 75% on a year over year basis.

Then There Was Eight?

There are currently six U.S. companies valued at a market cap of $1 trillion or more. Yes, I am talking about most of the "Magnificent Seven." Among that group, only Tesla TSLA is not in this elite trillion dollar group. Among former "FANG" names, only Netflix NFLX is not a member. Globally, Saudi Aramco makes seven. Another Sarge name is now bumping up against that level. This one is not a traditional "growth" stock, but well known as a value play. I speak of Berkshire Hathaway BRK.A, BRK.B.

Last night BRK.B closed at $460.63, up 1.35% for the regular session, leaving the market cap at $992.9 billion, up $218 billion year to date. I see those shares trading with a $462 handle well ahead of this morning's opening bell.

Marketplace

Some traders have taken the week off. Many others may have shown up for work, but clearly did something else in between the opening and closing bells on Tuesday. The S&P 500 and Nasdaq Composite both closed up 0.16% on Tuesday. I bet that's kind of hard to do, unless everything is controlled by algorithms. Psst ... everything is indeed controlled by algorithms. The Philly Semiconductors were up 1.1%, but no other index among those I watch was up more than 0.33% (Nasdaq 100) or down more than 0.83% (Dow Utilities).

Among the 11 S&P sector SPDR ETFs, five closed higher, with Technology XLK in the lead at +0.61%, and five closed lower, with Energy XLE in last place at -0.93%. Materials XLB managed to close "unchanged" which is something that has become very difficult to do in the era of decimalization (post 2001).

On Tuesday, losers beat winners at the NYSE by a rough 4-to-3 margin, but by more than 3 to 1 at the Nasdaq. Advancing volume took a 41.6% share of New York Stock Exchange-listed trade and a 44.3% share of composite Nasdaq-listed activity. How meaningful was that price discovery? Aggregate trading volume was down 4.7% day over day across NYSE-listings and down an almost stunning 14.6% day over day across Nasdaq-listed securities.

In fact, Tuesday was the lightest day of trade across the membership of the S&P 500 since July 3, which was a half day of trading. Excluding half-days, Tuesday was the lightest day of trade across the S&P 500 since the last week of December 2023.

Super Micro Computer Split

I know you saw the Hindenburg news on Super Micro Computer SMCI. Readers can see the run for this stock from late 2023 into March 2024. Anyone in this name, and I  am not, must ask themselves with a 10-for-one stock split set for Oct. 1, has the stock been rescued by the 78.6% Fibonacci retracement level of that move? 

Or has resistance built up at the 61.8% Fibonacci retracement level of that move. If this turns into a trading range, that could be a profitable development for traders bearing no conviction in the stock. There's more than $150 in between those two levels.

Economics (All Times Eastern)

7:00 a.m. - MBA 30 Year Mortgage Rate (Weekly): Last 6.5%.

7:00 - MBA Mortgage Applications (Weekly): Last -10.1% w/w.

10:30 - Oil Inventories (Weekly): Last -4.649M.

10:30 - Gasoline Stocks (Weekly): Last -1.606M.

The Fed (All Times Eastern)

1:15 p.m. - Speaker: Reserve Board Gov. Christopher Waller.

6:00 - Speaker: Atlanta Fed Pres. Raphael Bostic.

Today's Earnings Highlights (Consensus EPS Expectations)

Before the Open: ANF (2.28), CHWY (.21), HL (-.08), SJM (2.17), KSS (.44)

After the Close: AFRM (-.47), COO (.91), CRWD (.97), FIVE (.54), HPQ (.86), NVDA (.64), OKTA (.61), CRM (2.36)

At the time of publication, Guilfoyle was long CRWD, NVDA, MSFT, GLD, AAAU, BRK.B.