The selling that took place on Friday carried over yesterday coming off the three-day weekend. It was a retreat paced by the mega-cap stocks and small-cap stocks, and it was a retreat rooted in the notion that many stocks had gotten ahead of themselves and are due for a pullback.<\/p>\n\n\n\n
That notion is still intact this morning with several growth stocks issuing disappointing guidance in conjunction with reporting their latest quarterly results.<\/p>\n\n\n\n
Palo Alto Networks (PANW)<\/strong> is the standard bearer in that respect. It is down 25% in pre-market trading and is acting as a drag on other cybersecurity stocks such as CrowdStrike Holdings (CRWD)<\/strong>, which is down 11%, and Fortinet (FTNT)<\/strong>, which is down 7%.<\/p>\n\n\n\n Other guidance offenders included Keysight Technologies (KEYS), Teledoc Health (TDOC), RingCentral (RNG)<\/strong>, and SolarEdge Technologies (SEDG)<\/strong>. They are all down sharply in pre-market trading.<\/p>\n\n\n\n Currently, the S&P 500 futures are down 14 points and are trading 0.3% below fair value, the Nasdaq 100 futures are down 108 points and are trading 0.6% below fair value, and the Dow Jones Industrial Average futures are down 78 points and are trading 0.2% below fair value.<\/p>\n\n\n\n The guidance from Palo Alto Networks clearly took investors by surprise. The stock has been a star performer for some time, but failing to live up to the high growth expectations has created some nervous energy in front of NVIDIA’s (NVDA)<\/strong> earnings report after the close.<\/p>\n\n\n\n There is a lot of bullish sentiment (and hefty gains) wrapped up in NVIDIA’s stock, so the market’s reaction to the report will be just as important as what the AI leader reports.<\/p>\n\n\n\n Notably, Bloomber<\/em>g reports that the positioning in the options market ahead of the report implies a nearly 11% move in the stock following earnings. There is no way such a move — up or down — won’t have a ripple effect on the broader market, which is why there is some hesitation (and some profit taking) ahead of the report.<\/p>\n\n\n\n NVDA is down 2.0% in pre-market trading, crossing around $680 per share or roughly 6% lower than Friday’s closing price.<\/p>\n\n\n\n