Stocks Closed Higher Yesterday, All Eyes On NVIDIA Earnings After The Close Today

Stocks closed higher yesterday, led by the small-cap Russell 2000 with 1.20%, and the tech-heavy Nasdaq with 1.05%.

It's been a busy couple of weeks in terms of economic reports and headlines. Most of it was inarguably good news. That includes the relatively soft inflation reports, and the better-than-expected employment report.

Less obvious was the first take on Q4'25 GDP. While it came it under expectations at 1.4% vs. the consensus for 2.8%, and Q3's 4.4%, that was largely due to the record-long (43 days), government shutdown, which began on October 1^st and went thru nearly the full first half of November.

Last week's Supreme Court ruling that the President does not have the authority to place tariffs on other countries thru the International Emergency Economic Powers Act (IEEPA) was a potential negative. Not the ruling itself, as the President can tap 5 other statutes to reimpose those tariffs (two of which he already has), but the uncertainty it has created.

But the market has shown how resilient it is. And that's due to the underlying strength of the economy and corporate America (read strong earnings).

In other news, yesterday's Case-Shiller Home Price Index (unadjusted) slipped -0.1% m/m vs. last month's flat reading (0.0%). The y/y rate was steady at 1.4%, in line with last month's pace and views for the same.

And the Consumer Confidence report showed the Index at 91.2 vs. last month's upwardly revised 89.0 (from 84.5), and estimates for 88.0.

The Consumer Confidence report is always an important gauge given that 70% of GDP is comprised of consumer spending. And a confident consumer is a spending consumer.

Today we'll get MBA Mortgage Applications, New Home Sales, and the Survey of Business Uncertainty.

We'll also hear from another 317 companies on deck to report earnings. That includes NVIDIA, which reports after the close. They have shown 10 quarters in a row of at least double-digit growth rates (two and a half spectacular years of growth). Five of those quarters were triple-digit growth rates, with one quarter showing quadruple-digit growth. Another fantastic quarter could potentially reset the AI trade, putting it back on the right track and dispelling the notion that AI is in a bubble.

We'll also hear from Snowflake and Synopsys after the close as well ? 2 companies in the software industry, which have been under pressure due to AI disruption fears. But AI is not the death of software. It's an enhancement of software. While AI will soon become the dominant layer of value creation on top of software, or the intelligence inside software, it's not to software's demise, but rather its betterment, which in turn accelerates software's demand and dominance across industries. There will be disruption, just like there is in every industry. But the strong will survive, like always. And those who innovate.

Stocks are still underwater for the week, so far. But not by much.

And a little bit of good news could get them back in the green by week's end.

See you tomorrow,