Market Takes it Moonshot, Scores Biggest Landing Ever!

The stock market that fell hard on Tuesday, in fear that Nvidia might not come in with a strong enough report to justify its extraordinary valuation, blasted off today due to a report by Nvidia that sent the AI tech company on a rocket ride that delivered the greatest single-day ascent for any stock in history (up $227-billion or a 16% gain, the largest one-day gain by dollar value ever).

This spaceship to the moon also lifted the S&P 500 index and especially the Nasdaq to new record highs. The Dow went up 1.18%; the S&P, 2.11%; and the Nasdaq, almost 3% (2.96). It also propelled stock rallies all over the world, turning today into a global party for busting out the champagne. The corks were especially popping in Japan where Tokyo’s long laggard market finally broke past its last high, which was set clear back in the distant 1900s (1989)! The sake is flowing in Tokyo.

To give you a sense of scale, the one-day lift for Nvidia was an amount equal to the full value of Netflix or the full value of two Goldman Sachs put together (as measured by market capitalization). Yes, the total value of Netflix, scoring a spectacular one-day moonshot!

Said Morgan Stanley analyst Joseph Moore:

“We had never seen $2 billion+ of upside to quarterly revenue guidance until Nvidia did it a few quarters ago, but it has become routine during the AI surge,” he wrote.

“Strength of AI demand continues to be remarkable.”

With a record rise that amazing, this white-hot AI-driven ride makes the flaming melt-up for the dot-com bust during the internet-launching days of the early 2000s look like a mere bottle rocket. I’m sure the rise was fully justified, of course, just like the euphoria during the dot-com melt-up. Maybe by the end of the year, Nvidia, having re-taken high ground from Alphabet and Amazon, to hit a total value of $1.94-trillion today (reaching for Apple’s high orbit of $2.85T) will become the world’s first $10-trillion company. And to think only a few years ago, we were astonished when Apple soared past $1-trillion.

For some reason, some think market “positioning is worrying and nobody seems to care.” (What party crushers.) Based on volatility measures, the stock market has never looked calmer or more relaxed about the future now that it has achieved this stunning victory.

The decoupling between upside and downside vol in these stocks is reminiscent of the 2000s tech bubble.

There you go! Party crusher!

Sure, there is a little gap between the leading stocks and the rest that refuse to be led:

This is most notable in the Nasdaq, where Nvidia and Meta account for almost 70% of this year’s gains….

Nomura cross-asset strategist Charlie McElligott explains it thus: “The key to equities seemingly being able to keep shaking off nascent pullbacks? Well outside of the ongoing ‘AI euphoria’ theme and de-grossing of shorts, which continues powering spectacular rallies in the ‘worst of’ junk companies, it’s been all about the Pavlovian ‘Options Selling’ — flows which continue to suppress volatility.”

Well, Pavlov and his optional slobbering hounds aside, today’s ride in the market was fittingly capped by a real moonshot: The “Odysseus” lunar lander built by Intuitive Machines landed successfully on the moon today at 6:24 PM ET. So, a new space age has begun with the stock market being the spaciest space of all.

Happy landings!