Anticipation builds as NVDA earnings loom: A potential $316 billion market cap swing awaits

• Stocks did nothing as we wait.

• Bonds did nothing as wait.

• Oil fell by 2% and is down another 1% today.

• Gold holding steady in mid-century.

• NVDA after the bell but so is CRWD, CRM & HP.

• Try the Stuffed Chicken Cutlets.

Carly Simon – 1971 “Anticipation – is making me wait……”

And that possible 10% move (up or down) in NVDA that the options market is pricing in – implies a $316 billion change in market cap…. think about that for one minute…. $316 billion change in market cap.  95% of listed companies in the S&P don’t even have a market cap of $316 billion – marinate on that for a minute….

All this as stocks hovered near their highs, just waiting for the news….news that is now only 12 hours away….The Dow up 10 pts, the S&P up 9, the Nasdaq up 30, the Russell lost 15, the Transports lost 85 and the Equal Weighted S&P added 1…

it was a very quiet day….we are in the final week of the summer, volumes are low, and moves are exaggerated……and they will be even more exaggerated tomorrow – why – because “the” earnings are not due out until AFTER The close of trading today…..so we’ll get the reaction at like 4:11 pm….which will guide the action for the broader market tomorrow, not today…. So, we wait….

What I think is a bit ridiculous is that many are wondering if ‘the AI euphoria still has room to run’!  Are they kidding?  Is someone really asking THAT question?  Again, listen to me, we are still very much in the infancy stage of where we are going…no one really knows where the road will take us, they just know we are on it and can’t get off now….

The other question is ‘Can they at least match Wall Street’s lofty estimates’ – to which I would say – First those are Wall Streets estimates, not the companies estimate.  Second, JH (Jensen Huang) knows what the estimate are, he’s not a dummy, if he thinks that the estimates are way off, that the street’s analysts have completely screwed it up, he would have told them by now….Because that is part of the process….you see – analysts have relationships with the company and the C suite…they talk (they are supposed to), they gather info, they use channel checks, they compare what other companies are saying about AI and how they are powering it (who they are using to support their efforts)….and then they ‘come up’ with a number…. Companies that think the number is too ‘lofty’ will send that message via those ‘channels’ ….…and then analysts will ‘adjust’ their estimates – like they always do…(in fact we are starting to see 3rd qtr. earnings getting ‘adjusted’ – I’d say slashed, but that implies something negative)…

And so, I am willing to bet that not only will JH meet the estimates, but he will beat them and then offer robust guidance as well. – which does NOT mean that investors, traders and algos’ WON’T hit the sell button…. I suspect many will – just to lock in the profits – they have made big bets and today after the bell, is the ‘payday’.  And again – UNLESS the thesis changes, UNLESS JH says something that is completely negative (not happening) – I am not wavering…. Now at some point – NVDA will not grow at the rate it is growing, I’m just saying – that point is not NOW…

Look – the top 3 holders are:   Vanguard owns 2.1 billion shares, Blackrock owns 1.9 billion shares, Fidelity owns 1 billion shares…..the stock is up 187% this year ALONE (795% in 2 yrs.) – it would make sense that these 3 holders (never mind all the others) might ‘trade’ around the core position (not sell the core position)….to raise some quick cash….to redeploy somewhere else….or just hold the cash to see how the chips fall. And then you have all those algo traders that have no loyalty to the name in the long run, but love to trade it in the short run….What I am saying is – UNLESS the long term thesis changes – as a long term investor – do not over react to this report…..

And think about this – CRWD, CRM an HP are also reporting today after the bell, but you didn’t know that…because NVDA is sucking all the air out of the room….  CRWD will be interesting as they are still reeling from that failure last month…that stock has lost 35% - what can they say to help themselves at the moment…. (not much in my opinion) – but let’s see.

Bonds did nothing really; the 2 yr. is yielding 3.86% and the 10 yr. is yielding 3.81%.

Oil lost 2.2% to end the day at $75.76 and is down another 1.2% today as the whipsawing continues….Yesterday we learned that the Hootie’s hit a Greek tanker in the Red Sea causing it to burn and leak oil , Russian production rebounded to their highest level in nearly 2 months and the API reported that US crude inventories fell by 3.4 mill barrels last week. All of that a mixed bag – some of it bullish, and some of it bearish…and with the geo-political situation being what it is…. oil remains volatile…Once again we have broken the long term trendline at $75.87 – leaving the $72 range as support….

Gold remains in the mid-century – trading at $2555.   This morning Gold is down $9 at $2546.  It remains in the $2525/$2575 trading range on the hopes that we get a 25 bp cut in September…If we do, I would not be surprised to see gold traders take profits in the recent move to new highs…while remaining in the broader $2500/$2600 trading range.

Eco data today includes only mortgage apps…. last week they were down 10%....

US futures are UP (really flat) …. Dow futures are +20, S&P +4, while the Nasdaq +11 pts and the Russell is +2 all as we wait for NVDA earnings after the bell….and more inflation data at the end of the week.

Don’t forget even if the numbers blow the roof off – it will be the guidance that everyone focuses on….and if for some reason the guidance isn’t what the algo’s expect – then watch as the algo’s melt down……Again any disappointment will create large waves of selling that will reverberate across the whole tech space…. While any perception that JH is just ‘killing it’ will send the algo’s into a frenzy…

European markets are all higher by about 0.5%. 

The S&P closed at 5625 – up 9 pts.   I do not expect much action today as we wait….  But watch what happens at 4:10 est….

In the end - it is important to always take a ‘balanced’ approach to long term investing…try not to make ‘emotional’ or ‘rash’ decisions, yet do not become so complacent that you lose sight of what is going on around you.

Stuffed chicken cutlets

For this you will need:  8 Thin sliced Chicken Cutlets, 2 Cups Sautéed Spinach, Grated Pecorino Romano or Parmegiana Cheese, Thinly Sliced Pancetta, S & P, Olive Oil, Garlic, Peeled & sliced, Chicken Broth, Dry White Wine, Butter & Flour.

Sauté your fresh spinach in a bit of garlic and olive oil – seasoned lightly with s&p.

Lay the cutlets out flat on wax paper and lightly season with salt and pepper.  Next divide the spinach amongst the eight cutlets, careful not to overstuff - leaving a little space along the sides. Now sprinkle a tblspn of the cheese on top of the spinach on each of the cutlets.

Starting at one end, tightly roll the cutlets – now wrap the pancetta around the chicken pinch it tight a toothpick. If it is a big cutlet, you may need two pieces of Pancetta.  (You can also choose to use cooking string to tie it up – but the toothpicks are easier.)

Now - In a large, heavy bottom skillet, add some olive oil over med high heat and add the sliced garlic.  Sauté for about 3 mins – now add the chicken and brown on all sides, about 5 – 8 minutes.

Next - Add equal parts of chicken broth and wine and bring to a boil.  (Usually, a cup of each will do for 8 cutlets).

Reduce the heat to a simmer, partly cover the skillet and cook for 15 minutes.

Now remove the chicken and bring the remaining wine mixture to a boil.

Season with s&p, - - now add dollop of butter and maybe a tsp of flour and allow to thicken just a bit. (if it is not thickening – you can always add a bit more butter and flour) When thickened – add the chicken back to the sauce and coat well.  To serve - Place the chicken on a platter and pour the sauce on top.  Make sure to have a mixed green salad to accompany.  If you want – you can add a side of garlic and herb flavored rice.  No need for a veggie – it’s in the cutlet.