Last week, I saw the following quote via Bloomberg in response to NVDA’s blowout earnings on Wednesday and the subsequent move in its share price the following day (Thursday):
“Today’s (Thursday, May 23rd) a pretty unusual one insofar as the Nasdaq 100 is trading lower even as one of its biggest names is up huge (NVDA). In fact, this is only the seventh time in the past 34 years that we’ve seen a trading day like this, assuming all current prices hold to the close (Note: NVDA finished +9.32% and NDX finished -0.44% on Thursday).
Using data for all current members of the NDX (so there is clearly a possibility that we saw more days like this from names no longer in the index), I filtered out all days since 1990 when one of the top 3 market-cap stocks was up at least 7.5%, but the index itself was down. The list of precedents is a pretty motley one, including some of the darkest periods of the market’s history as well as the very early stages of the dot-com era.”
01/18/1990 - MSFT
01/16/1992 - INTC
11/11/1994 - CSCO
08/18/1995 - CSCO
01/19/2001 - MSFT
11/25/2008 - GOOGL
05/23/2024 - NVDA
If we plot these days on a chart of NDX, we get the following:
Column 1
Column 2
Column 3
0
All six instances were associated with minor to major drawdowns in the coming weeks/months while three of the six were just in advance of or directly associated with a recession
Column 1
Column 2
Column 3
0
S&P 500 - Fair Value
An update on my S&P 500 fair value chart.
The red line in the chart below is the fair value I have constructed for the S&P 500. Based on my model, the current fair value for the S&P 500 is 2,577.23.
Friday’s close on the S&P 500 was 5,304.72.
This means it would take a decline of -51.4% from the S&P 500’s current value to its fair value.
