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T3’s Market Wrap: Happy Robot Day for Nvidia and Apple

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The Nasdaq Composite hit a record high at 6608.30 today on a big surge in shares of chipmaker Nvidia (NVDA).

Nvidia made its own new all-time high at $192.95 this morning after announcing several new artificial intelligence initiatives. The company unveiled technology called Drive PX Pegasus to power robotic taxis, and a new virtual reality design tool. Nvidia also said it is partnering with delivery company DHL to test autonomous delivery trucks.

Nvidia finished up 1.9% at $188.88, with its main rival Advanced Micro Devices (AMD) gaining 1.7%.

Today, T3 Live published a poll on Twitter asking traders if they believed Nvidia could hit $250 by 2018.

76% said yes:

The early gains in tech stocks like the aforementioned Nvidia, as well as Apple (AAPL) and Tesla (TSLA), pushed the SPX to a fresh record high of 2544.86. The index finished 0.2% at 2550.64.

Apple had an unusual stock price jump to $158 after news service Dow Jones accidentally published a headline saying Google (GOOGL) was acquiring Apple for $9 billion.

Since Apple has an $800 billion market cap, that news was obviously fake… not that the algos care about stuff like that, as you can see on the chart:

This morning, T3 Live Chief Strategic Officer Scott Redler said “2540 held on the first breather in a while. If that holds, a new flag-type pattern can develop if that holds. Pivot resistance is 2552.”

This afternoon, the SPX bottomed at 2544.86, above Scott’s outlined support level at 2540. The index closed just below pivot resistance, so we’re back to that “sitting on the razor’s edge” feel.

The Russell 2000, which has been cooling off in recent days, showed a little relative strength, gaining 0.3% at 1508.01.

The VIX also extended its streak with a lot of 9.94 today, marking the 19th straight day with a sub-10 intraday low.

That’s truly remarkable since the VIX dipped below 10 on only 54 days since October 2014, when the CBOE changed the VIX calculation methodology.

(click here for a primer on the VIX)

US Treasury yields fell slightly today ahead of Wednesday’s Fed minutes, but banks stocks had a pretty strong day with the S&P Financial ETF (XLF) rising 0.5%.

The dollar fell today, which helped gold put in its third straight up day.

However, gold mining stocks, which have been very strong in October, dropped.

Third-quarter earnings season will kick off later in the week as megabanks JP Morgan (JPM), Wells Fargo (WFC), and Bank of America (BAC).

FactSet just released its summary of expectations for the quarter, so let’s take a look at the numbers.

FactSet’s data shows that analyst expect S&P 500 earnings growth of 2.8% on revenue growth of 4.9%.

Analysts believe the weaker dollar will benefit companies that generate more sales outside of the US. For companies with more than 50% of sales overseas, earnings growth is expected to be 7.9%. In particular, technology and energy companies should benefit.

But what’s really interesting is just how low expectations seem to be.

On June 30, earnings growth was estimated to be 7.5%. Now it’s down to 2.8%, giving companies a much easier hurdle to jump over.

This has been the trend for years — expectations come way down, allowing companies to beat expectations and push stocks higher.

I wonder if that’s about to change…

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