Nvidia Beats Earnings: THIS Is What Comes NEXT For Stocks

Like & Subscribe it's be right you cannot stick it in the ground it's not going to work who did that got to put it in the shoe welcome everybody to the Daily recap show where we talk about stocks and the financial markets my name is Chase guys if you like this video hit that subscribe Button as well as the notification Bell hit the like button too and leave a comment for the algorithm it really really helps me out let's get into it this is the daily heat Markets Wrap map of the S&P 500 and today's day was pretty much exactly like every other day so far this week a very mixed day gainers in cyclical sectors Tech getting sold off as the rotation continues but there's also a bit of anxiety we hadid's earnings after the belt same with see M same with CRM as well as crowd strike so big players so big players from each of the technology sub sectors that's why Tech was grinding and digesting in today's trade however we saw outperformance here in financials as well as Healthcare and then utilities were also quite green certain sectors of Industrials were green others were very very mixed and then the rest of the market was kind of red it was a very average day a day of pure digestion financials Healthcare utilities out before for but nothing to write home about and then Tech and discretionary really Weighing on the entire Market down 1% and 8% respectively along with energy communication Services down 6.4% and this is really why the broader Market actually lost today the S&P 500 fell netive .6% the Dow JS and the RSP were the best performing sectors up2 8.39 respectively the worst performing was the q's the NASDAQ 100 down more than 100 BAS points here today we did see a huge move off the lows around 1 p.m. in all sectors especially in the NASDAQ 100 things got a bit oversold here especially on an intraday basis but it was selling across the factor Spectrum growth core and value in large small and midcaps really took it on the chin I mean excluding large value which is like you know utilities and financials really they were pretty much flat on the day every other sector was down big especially growth not a fun day for growth assets large growth down 1.26% small growth down 1% midcaps actually fairing the best and midcaps have actually performed the best so far this week it's very interesting because in the community poll people were least bullish on midcaps and yes we are in a red week here for the broad Market but midcaps outperforming respectively but regardless of size value outperformed and value really did produce Alpha in the market today at least relative to the downside but today's trade was really just isolated in North America the US and Canada were pretty red but Europe was actually fairly green same too with South America China continues to be a dumpster fire but it's 2024 what's new the rest of Asia was really really green as well the global market not quite seeing the same selling excluding China that the US saw today that's a good thing you know you do want the broadening out to not just be in large mids and Smalls in the US you do want to see the global market broaden out as well and that's very very healthy but let's hop on the charts and looking Technical Analysis at the charts the first thing that we want to look at is what's happening in the extended hours right here because we had Nvidia report its earnings Salesforce as well as crowd strike now if you go to the time stamps link below you can actually just go to my overview of what I think about earnings Nvidia crowd strike Salesforce but we can see that we are seeing a little bit of weakness here in the cues down 74% in the after hours in the context of being down 1.13% so you know in aggregate a very very poor day for the technology space the NASDAQ 100 the iwm virtually flat same with the RS P again so the broader Market not really seeing same type of weakness that we are seeing in technology and to be honest I think a lot of the losses in the qes is actually offset by stuff like crowd strike like Salesforce they actually did produce great earnings and to be honest nvidia's earnings were great record Revenue double beat $50 billion in BuyBacks margins actually held in there that was the story of today we didn't hear much on Blackwell and I think that's part of the reason why the market sold off on Nvidia but I think the market is probably going to find a bottom in Nvidia is earnings to be honest you saw a 5.6% surprise here in earnings a 4% surprise on the revenue side $30 billion worth of Revenue in my personal opinion I think that the market is going to find a bottom in Nvidia over the next couple of days and then which probably going to go to all-time highs I think these earnings Warren Nvidia going to all-time highs in my personal opinions I just think that the the reaction today was just a bit overdue but these earnings were constructive for the market in aggregate but moving away from nvidia's earnings looking at what actually happened in the yield complex yields were very very mixed the 2-year yield was actually down here today 87% the 10-e yield up 44% and the 30-year yield is up 29% as a result bonds did fall but what really weakened the overall US market here today was not actually the yield picture it actually had to do with the dollar the dollar gained half a percentage point and it and it has been a little bit of a dumps defier here in the last month or so the dollar weakness is part of the reason why risk assets at the start of August have actually rallied you know a weaker dollar is really good for large caps and really good for companies with International revenues a dollar has been a bit of a dumpster fire but I think we're going to see a little bit of reprieve here over the next couple of days maybe even the next couple of weeks the market can't just consistently go down go down go down or go up there is es and flows as you can see right here we're due for a little bit of a bounce I do see continued dollar weakness looking longer term 6 months 12 months down the line but in the year and now we should see a little bit of dollar strength in the next couple of weeks looking at gold and the commodity complex gold was down 89% silver a bit of a dumpster fire down 2.82% and the crude was down 1.34% let's actually dive into the S&P 500 and guys I feel like a broken record nothing has really changed when it comes to the the gamma situation we're still at 5450 could support 5700 call resistance gamma flip at 5550 you can actually see that here at the gamma flip buyers came in in a very big way we just pull up the 5 minute chart we saw lower lows lower highs until we actually formed a bottom right here and then we actually rallied cir 2 p.m. and then we actually went and broke some of these highes now we didn't close above them but we did have price actually above and that's very very constructive all things considered the S&P 500 is just digesting gains I still think as long as we're above the 550 region we still go tackle the 5700 area but if we do start to have price action below here I think the alos and the sellers are going to come in a very big way and I think we're going to go to 5450 very very quickly so the Bulls are in a very critical position they need to hold this line right here at the 5550 eror because if they don't we're going to break and go down but if they do it's 5750 all the way a lot of this is going to depend on yes nvidia's earnings how the mag 7 reacts to nvidia's earnings as well as the dollar you guys have to be watching the dollar right now because if it is going to make a move let's say back to the 103 104 region like up here at these highs that's going to coincide with large cap and midcap weakness not so much small caps small caps are more dependent on the rate complex and we do know rate cuts are coming but a lot of them have been priced in already CU when you look at the 10-year yield sitting at 3.83% 2year yield 3.86% and the 2year 10e yield is so close to uninverted and that ultimately is going to benefit small caps now the iwm I'm constructively bullish on the iwm as long as we're Above This 210 area I think we could pull back find support here and then go but it does get a little bit ugly below the 210 because we could then bring these lows back into play and you don't really want that what you really want to see is support at the 210 or anywhere before that and then make a move higher break these highs break these highs that would signal Trend continuation in what has been a very choppy and range bound year but still positive all things can considered the q's the NASDAQ 100 looking a little bit sick it's getting really ugly now the q's are down 1% here in extended hours nearly that's 2.1% down for the day that's really ugly price action very poor performance I'm actually bullish I thought nvidia's earnings was actually good thought the earnings was good the guidance was all right the guidance came in line it actually was a tiny bit of a raise having looked at it again but I think we're probably going to see but I think we're probably going to see some Mega cap weakness into this weekend into labor day and the RSP chart still looks really really good yesterday we said we we target the 177 area as our support Zone and nothing has changed since if we pull back and find support at this 177 era you can then continue to move higher break these highs Trend continuation that's really what we're looking for in the RSP and the iwm we're looking to find a low and then continue the trend that we've built upon whereas the qes need to go figure out what they want to be when they grow up and the S&P 500 as long as we're above positive gamma we're buying dips selling rips but a lot of the the weakness that we're seeing in tech stocks is going to flow in into stuff like the S&P 500 down 61% right now so we're going to see what that's going to look like in tomorrow's trade and do take into consideration that heading into labor day we are in a seasonly weak period so so expect volatility and even more so if we break the gamma flip Zone here in the S&P 500 Sentiment and Seasonality diving into sentiment this is CNN's fear and greed index very interesting we're here in the neutral zone looking like we're about to push into greed but we're going to see what's going to happen over the next couple of weeks I think this indicator is going to be more dependent on the economic data now that Nvidia is officially behind us and we go back to trading of the macro and trading off the technical with the fundamental picture taking a back seat and we do have the Labor Day weekend next week and these are the returns the week before the Labor Day weekend you can actually see that Wednesday before Labor Day tends to be very bullish across the board in the Dow Jones the S&P 500 the NASDAQ 100 as well as small caps small caps being the most bullish but then we actually get subpar Returns on Thursday as well as Friday across all of the indices but let's just look at the S&P 500 you can see that Thursday returns 0.05% pretty much flat and then negative 0.09% pretty much flat a slight red day in aggregate the week is actually normally green however do expect choppiness and volatility over the next couple of days the hit rates 57.1% tend to be very poor across the board so guys if we do get volatility heading into this long weekend a little bit of drisking a little bit of profit taking a little bit of hedging if we do get that activity into the weekend don't be surprised seasonally that is what normally happens so let's talk about NVDA / CRM / CRWD earnings we had a pretty big day of earnings croud strike actually reported a double beat they beat on EPS beat on sales they were up like 2 3% in the pre-market the market really liked their results but still way way down from the all-time high CRM also dropped their earnings and great earnings as well same thing a double beat beat on EPS beat on sales handily they were up 2 to 3% as well maybe 4% really good earnings now Nvidia reported a double beat they beat on EPS beat on sales expectations going into this was about 28.7 billion sales came in at about 30 billion earnings per share came in at 68 cents versus 64 cents but the big thing was actually guidance and I'm going to read something directly from the earning report outlook for the third quarter fiscal 2025 is as follows Revenue expected to be 32.5 billion plus or minus 2% that would represent a 75% growth year-over-year for the quarter Gap and non-gap gross margins are expected to be 74.4 and 75% respectively very high margin still plus plus or minus 50 basis points for the full year gross margins are expected to be in the mid-70s Gap and non- GAP operating expenses are expected to be approximately 4.3 billion and 3 billion respectively fully operating expenses are expected to grow in the mid to uper 40% range Gap and nonap other income and expenses are expected to be an income of approximately 350 million excluding gains and losses from non-affiliated Investments and publicly held Equity Securities Gap and non-gap tax rates are expected to be 177% plus or minus 1% excluding any discrete items so guidance still looking solid no guidance raise I think this was the guidance that the street actually expected margins held in there the stock was actually down about 6% on its initial reaction it's down about 2% right now so you can definitely tell that these earnings were met the Street's expectations but a lot was already priced in and that's why we're seeing a little bit of after hours weakness nonetheless the fundamental picture remains intact for NVIDIA and what Nvidia does on its initial earnings reaction is generally what the market will do Nvidia earnings have been a key driver of broad market performance in the short term this is nvidia's reactions two earnings and it's highly correlated with the Market's performance What comes next for stocks? over the next 2 weeks you can see that when Nvidia has a huge reaction after earnings the broader Market in the suban week gains as well likely but when Nvidia has a terrible reaction so goes the broader Market as well so with this initial reactions it could spell a bit of volatility for the broader Market into the next week but regardless of what Nvidia does over the next week I think the broader Market is going to be okay because we are seeing clear signs of a broadening out since the 1st of July the RSP has clearly outperformed the NASDAQ 100 and stocks outperforming the S&P 500 is at the highest level in 2 years and historically right now the S&P 500 equal weight trades at a near record discount to the market cap weighted S&P 500 and this is part of the reason why the market is broadening out excluding the mag 7 the S&P 500 looks very very attractive for longer term gains and we're also going into a cutting cycle and at the end of the day easing Cycles have an outsized impact on smaller companies Smalls and midcaps simply because there's just more unprofitable companies in those indices 44% of small cap companies are unprofitable 19% are unprofitable in the midcap space and only 7% of large cap companies pretty much S&P 500 companies are unprofitable and this is on a proformer EPS basis but a rising tide lifts all boats and equities tend to perform very well after cutting Cycles when economic growth is robust in other words when we don't have a recession and 12 months 18 months later we can see returns of up to 20 to 40% in the S&P 500 however if a recession is to follow we could actually see pretty deep draw Downs only getting back to even around 2 years 24 months later however we do know we're not going into recession and the reason why the FED are cutting rates is actually to decrease the real cost of capital this is the real fed funds rate which is the Fed funds rate minus core pce or the inflation rate the real cost of capital right now is 2.87% the Fed want this in the 0 to 1% range this right here is too tight and in similar scenarios like in 2019 and in 2023 when the FED funds rate is too tight we get outsized returns because the FED Cuts rate 12 months later 16% returns and 28% returns respectively but when the FED funds rate is too easy like it was in 2021 2022 you can actually see very subpar returns 12 months later 9% 5% respectively and diving into the The Economy macro we got Goldman Sachs latest GDP tracking estimate this is after last week's data and they increased their third quarter tracking estimate by .1 to 2.5% quarter over quarter annualized very strong GDP we always want in between 2 to 3% we're sitting smack bang in the middle and while the consensus estimates are looking at 1.5% dolman are seeing stuff in their books that's contradicting that and I think they're looking at stuff like tax receipts August tax receipts are looking very very strong if you go to my videos and look three uploads ago I showed you the August tax receipts it was sitting at 5.5% we've now jumped up to 6.5% growth in the month of August the only negative month we've had so far is December 2023 and the last trailing 12 month tax receipts are looking at about 3.9% that's very strong the market expects tax receipts to track very similarly at about 2 to 3% we're sitting at 3.9% and strong tax receipts often mean the labor market is in decent shape and if we actually look at us variables by the NBR in making a recession determination they look at these six variables real personal income less transfers non-farm payroll employment the household employment survey real consumer spending real wholesale and retail sales and industrial production and we can see that things are looking I would say decent but deteriorating if you actually have a look at stuff like the non-farm payrolls real consumer spending and retail sales we actually have seen a jump up we actually have seen a move down in the last 6 months to what it is right now that's not a good thing industrial production has jumped up in a very big way the household employment survey continues to be a dumpster fire and real personal income less transfers right now is kind of sitting in the middle and I would call this data decent not good not great I wouldn't say it's bad but if the data does continue to deteriorate it will end up bad and we will get that recession call and that is why we're actually getting rate Cuts however we should see employment data improve for the rest of 2024 War notices point to lower initial jobless claims in the coming months War notices normally lead initial claims by about 2 months they have come down significantly and that means we should see initial jobless claims track lower which means less people are filing for unemployment insurance it probably means more people have jobs and that lends itself to a stronger consumer stronger economy in the backdrop of incoming rate Cuts we're going to see if this data comes to par if it does that's going to be good if not rate Cuts should support the underlying economy but that is in 2 months what about in the year and now and the most important data point we have tomorrow August the 29th is GDP second quarter revisions the forecast is to come in at 2.8% which means there isn't going to be a revision up or down which tells me if we do get an upside revision that's going to be very very healthy for the market I think the Market's going to really like that but if we get a revision lower that's not going to be good pending home sales can cause volatility particularly as we get rate Cuts we also want to see if lower mortgage rates because mortgage rates do lead the FED funds rate they have come down we want to see if consumers are taking advantage of that and that's going to be very key data for Real Estate home builders as well as financials we also get initial jobless claims the mediate for forec there is 230,000 and then the trade balance retail inventories and wholesale inventories those are going to be key too but tomorrow it's really going to come down to that GDP print and the initial jobless claims figure