While the major indexes were only down moderately Wednesday with the S&P -0.26% and NASDAQ -0.33%, things were much worse beneath the surface. NYSE + NASDAQ Advancers to Decliners was 2,588 / 5,426. That is, there were about 2 Decliners for every Advancer. The Russell 2000 ETF (IWM) was -1.31%, the Equal Weight S&P ETF (RSP) was -0.53% and the Ark Innovation ETF (ARKK) was -1.85%. Unless you are overweight a few of the Mega Cap Tech stocks that held up the market Wednesday, you probably underperformed the indexes.
Bulls can take some solace in a strong and well received earnings report from chip maker Nvidia (NVDA). NVDA put together another excellent quarter with revenue +50% and EPS +60% compared to a year ago. Guidance for $7.4 billion revenue and 67% gross margins for 4Q21 was solid as well. At 30x 2021 revenue guidance, I have some concerns about whether the good news is already priced into the stock. Nevertheless, NVDA is currently (2:15am PST Thursday 11/18) up ~6% in the premarket and the futures appear to be taking their cue from it with the S&P Futures up ~0.25% and the NASDAQ Futures up ~0.45%.
Lastly, I want to recommend a terrific interview Wednesday morning by Brian Sozzi and Julie Hyman of Yahoo Finance! with Miller Tabak Chief Markets Strategist Matt Maley. While so many on Wall Street are permabulls, it was refreshing to hear Maley say that the surge in Rivian (RIVN) and Lucid (LCID) are a “sign of an unhealthy market” and even suggest that we may be in a bubble like 1999. While – as Maley concedes – that doesn’t mean the market can’t go higher, it’s nice to see that some on Wall Street understand what’s going on and are willing to say so.