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Small-Caps Outperform, Most Indices Flat

Markets lost a bit of steam as the trading session moved along today, with strength in the pre-market after seeing the passage of a new bill on renewable energy, Medicare availability and corporate tax minimums in the Senate give way to disappoints from Tyson TSN and Palantir PLTR on earnings, NVIDIA NVDA on Q2 guidance. The Dow, which had been +300 points earlier today, closed +28 points - +0.09%. The S&P 500 and Nasdaq were -0.12% and -0.10%, respectively, while the small-cap Russell 2000 easily outpaced the rest of the pack: +1.17%.

The Russell is also the biggest gainer of the four major indices over the past month, with a very strong +12.2% versus the Nasdaq’s +11.2%, the S&P’s +7.4% and the Dow +5.3%. The small-cap index is still down year to date -14.6%, but that’s still better than the Nasdaq, which is still fighting its way out of bear-market territory, -20% from the first of the year. The Dow blue-chips are outperforming the field year to date, but still -10.3%.

Because NVIDIA is rightly seen as an important player in the world of semiconductors in the present and in the future, the company’s lowered guidance today carried a lot of weight in the early trading hours. We had seen a lower guide from competitor AMD AMD just last week, as well as disappointing earnings results from semi majors Intel INTC and Micron MU. As such, even with a slash to Q2 revenue and Gaming expectations, NVIDIA’s stock has “only” fallen -6.3% on the day.

Because slash guidance the company did: NVIDIA now expects Q2 sales coming in at $6.7 billion — well beneath the $8.1 billion the company initially guided, which also happens to be the Zacks consensus until downward revisions work their way through the system. Gaming is expected to come down -33% to $2.04 billion. NVIDIA reports earnings August 24th — three weeks from Wednesday. We’ve expected lower guides from top companies in most industries virtually all quarter.

Speaking of Gaming, Take-Two Interactive TTWO missed fiscal Q1 expectations on both top and bottom lines in the quarter, reported after Monday’s close: earnings of 71 cents per share was notably light of the 84 cents expected, while revenues of $1.00 billion was just shy of the $1.04 billion in the Zacks consensus. This marks the Grand Theft Auto and NBA2K creator’s second earnings miss in the past five years, and shares are down nearly -7% in late trading, -29.7% year to date.

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Intel Corporation (INTC): Free Stock Analysis Report
 
Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
 
Micron Technology, Inc. (MU): Free Stock Analysis Report
 
NVIDIA Corporation (NVDA): Free Stock Analysis Report
 
TakeTwo Interactive Software, Inc. (TTWO): Free Stock Analysis Report
 
Tyson Foods, Inc. (TSN): Free Stock Analysis Report
 
Palantir Technologies Inc. (PLTR): Free Stock Analysis Report
 
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