What a boring trading session it was on Tuesday. While a late-session rally elevated the indices — with the Nasdaq climbing 0.22% and the S&P 500 up 0.21% — both hugged the flatline for most of the day.
In fact, an odd anomaly stood out to me. The so-called “fear gauge,” more formally known as the CBOE Volatility Index (VIX) plunged on the day. Even when the S&P 500 was flat on the day, the VIX was down 5%. After the index’s slight rally, the VIX ultimately fell 8%.
What does that suggest? The VIX measures the 30-day outlook of future volatility. Essentially, investors aren’t expecting much in the next month, despite earnings set to start in a few weeks.
The Nasdaq continues to hover right near that key 8,100 mark and with this week’s interesting price action, it’s got investors wondering if new highs could be next. Combined with the weakness in the VIX, it’s encouraging that sellers aren’t pushing the markets down, even after Monday’s subpar rally. Let’s see if bulls can harness enough momentum to generate new highs.
Highlights on the Nasdaq Today
Despite the promising start to Monday’s trading session, chip stocks continue to flounder. Specifically, shares of Nvidia (NASDAQ:NVDA) fell 2.4% on Tuesday as the company unveiled its new “Super” chip lineup. Apparently investors weren’t wowed, as shares now flirt with support.
Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) self-driving unit Waymo took another positive step forward. While the unit has made great progress by offering autonomous driving taxi services in the Phoenix area, the company now has state approval from California. Well, sort of. It was approved for a permit to participate in the state’s Autonomous Vehicle Passenger Service pilot. It cannot charge passengers, will have a safety drivers and it will start with its own employees as the riders.
The company tends to roll out slowly and carefully, although that’s exactly what you want from a robo-taxi service. In any regard, Waymo continues to put distance between itself and its peers. It’s also exciting news for the autonomous driving industry.
Tesla (NASDAQ:TSLA) is seeing a somewhat alarming exodus of talent. The company’s engineering VP Steve MacManus has left, as has European Head Jan Oehmick. The reports are troubling as these two — and others — flee Tesla amid a big production push to end the second quarter. We’ll find out how Tesla’s production numbers came out soon enough, and while the company has always had seemingly high turnover, the news is still concerning.
Finally, T-Mobile (NASDAQ:TMUS) has apparently settled on a deal with Dish Networks (NYSE:DISH). The company is trying to meet various government concessions to get its deal for Sprint (NYSE:S) approved. This is one step closer, but the parties may still need to do more. Sprint rallied over 4.5% on the news. When will it finally end?
Caution From the Analysts
There were a few noteworthy calls this morning, despite the sleepy stock market. The first was on Roku (NASDAQ:ROKU), which received a downgrade from RBC Capital Markets. The analyst downgraded the stock from outperform to neutral and maintained his $90 price target. His actions seem justified given the stock’s major run this year (up 204% year to date). To be even more fair, the analyst said the rally was justified and that investors should buy on any major pullback. However, one could argue that it came a little late, with shares down almost 20% from its recent highs.
Citigroup analysts were cautious on Apple (NASDAQ:AAPL). The analysts are concerned about China’s impact on Apple, even though CEO Tim Cook said he believes the holiday period should mark the trough for its business in China. Further, the trade war just took a positive step forward and Apple’s most recent revenue guidance came in handedly above consensus estimates.
So what’s the problem? Analyst Jim Suva says that Apple’s China sales “could be cut in half.” That’s thanks to a “less favorable brand image.” Ironically, Suva maintains a buy rating and $205 price target on Apple.
Lyft > Uber? That’s according to one analyst, who raised his price target on Lyft (NASDAQ:LYFT) from $70 to $76 and maintained his buy rating. For Uber (NYSE:UBER), he initiated the stock with a hold rating and $50 price target. Although, with that $50 price target, it would mean Uber stock would need to breakout over its $45 IPO price. Perhaps that’s the silver lining.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL and NVDA, and AAPL and ROKU, no matter what the analysts say.