Those who fell for the Nvidia Corp (NASDAQ: NVDA) pre-earnings rally instigated by Morgan Stanley to save the market, sorry. The broad market cannot be gauged by one potentially highly overvalued technology stock that gets a thumbs up from a few analysts ahead of its next earnings report.
As evidenced by Wednesday’s price action, investors are much more concerned about other issues that plague the markets. Overall earnings decline for Q2, potential for rate hikes to tame inflation and overhead supply on any lame rallies.
Despite the index being in the green by over 10 handles a few times during the session, the gains did not hold.
The end result was a loss of 34 handles at the closing price of 4420. On a longer term basis, the index has been lower in 10 of its last 12 sessions. The two outliers were a 40-handle rally on August 7 and a flat session last Wednesday.
None of the top components of the index were in the green. Therefore, the biggest winner was the smallest loser, that being a more defensive stock Johnson & Johnson Inc. (NYSE: JNJ). For the session, the issue declined by $0.55 or 0.32% at the closing price of $172.39.
That performance was better than the cash index’s decrease of 0.76%.
In contrast, Tesla Inc. (NASDAQ: TSLA) continues to be in a freefall and was the biggest loser of the top components. The issue extended its losing streak to three sessions by declining $7.36 or 3.2%. $225.60 marks the lowest closing price for the issue since June 6.
