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August 1, 2024
DOW: 40,356.28
S&P: 5,468.82
Nasdaq: 17,348.00
10YR T-Note: 3.99%
Bitcoin: 63,032.92
VIX: 17.61
Gold: $2,489.6
Crude Oil: $77.13
Prices Current as of 12:07 pm
Source: CNBC
Don Selkin, the creator and innovator of the "Fair Value" numbers, as its Chief Market Strategist on the Newbridge platform has given CNBC and its Predecessor, these numbers every day for the over 40 years - never missing a single day, as well as given the fair value for the Nasdaq 100 futures since their introduction in 1996 and the Dow Jones stock index futures since 1997. Mr. Selkin has also been quoted in several publications including but not limited to Bloomberg News, New York Post, Reuters, and The New York Times. Mr. Selkin's Fair Value numbers are included in the U.S.
Futures Report broadcast on CNBC every day before the market
opens attributing "Newbridge Securities" as the source. In addition, NSC provides to its professionals, their clients and the public access to Don Selkin's more in depth financial market views.
Finally, after taking all of this abuse from lovers of small-cap stocks, the former big technology leaders finally got it together yesterday with a huge upside rally that should continue today based on good earnings reports from Mag 7 member META and QCOM as well.
The Dow gained 99 up to 40,842 led by advances in AAPL for a change, plus BA, GS and HD which has been higher for three straight days after its better than expected earnings report on Monday morning.
The S&P put in its best day since February with a large 85 point advance to 5522 led by you who which got its revenge against its detractors while the Nasdaq really caught the short-sellers by surprise with a humungous 452 point gain to 17, 589.
The Russell 2000 Index of small stocks sort of followed along with an 11 point advance to 2254 while the VIX finally came lower down to 16.36 on a very powerful day in equities.
Motivating the upside was the fact that investors grew even more convinced that long-sought cuts to interest rates will be arriving soon.
The widespread gains came as Treasury yields eased in the bond market after the Federal Reserve gave the clearest indication yet that it could begin lowering interest rates in September. Fed Chair Jerome Powell said policy makers are “getting closer to the point” of comfort about inflation where they could cut rates for the first time since COVID-19 crashed the economy.
“We think that the time is approaching,” Powell said. “And if we do get the data that we hope we get, then a reduction in our policy rate could be on the table at the September meeting.”
After the Fed voted to keep interest rates steady yesterday as was widely expected, Powell spent much of an ensuing press conference discussing the risks of both moving too early or too late with rate cuts. One could allow inflation to reaccelerate, while the other could cause unnecessary pain for the economy and ultimately throw Americans out of their jobs.
After keeping its main interest rate at a two-decade high for roughly a year, speculation may rise that the Fed waited too long. For Wednesday, though, the dominant mood was jubilance.
AMD gained 4% after reporting better profit and revenue for the latest quarter than analysts expected, thanks in part to accelerating artificial-intelligence business. That helped drive NVDA, the chip company that’s become the poster child for the frenzy around AI, to gain 13% a day after it lost 7%.
How such Big Tech stocks perform matters a lot because they’re Wall Street’s most valuable companies, and that gives them the biggest sway on the S&P 500. A handful of these stocks, known as the “Magnificent Seven,” drove the U.S. stock market to dozens of records this year, even as many other stocks struggled under the weight of high interest rates. But they ran out of momentum this month amid criticism they had grown too expensive and expectations had run too high.
Such criticism hasn’t gone away, and MSFT was lower despite reporting profit and revenue for the latest quarter that edged past analysts’ expectations. Growth in its Azure cloud-computing business fell a bit shy of analysts’ forecasts. That followed earlier profit reports from TSLA and GOOG that investors found underwhelming, which raised concerns that other Magnificent Seven stocks could also fail to impress. But MSFT had been as low as 389 after the results came out, so at least it closed well above that yesterday.
Things should start out higher today as META and QCOM did well on their reports last night.
MTCH jumped by 13% after saying its user trends for Tinder are stabilizing and reporting results for the latest quarter that roughly matched analysts’ expectations.
DD rose by 4% rose 4% after delivering better profit and revenue than expected, thanks in part to a recovery for the electronics business, and the chemical giant raised its financial forecasts for the full year.
They helped offset a 3% drop for MO after the maker of cigarettes and smoke-free products fell short of expectations for profit and revenue in its latest quarter.
In the bond market, the yield on the 10-year Treasury eased to 4.05% from 4.14% late Tuesday. It has been falling from 4.70% in April as a slowdown in inflation has raised expectations for coming cuts to interest rates.
Some of Wednesday’s strongest action was in the oil market, where the price for a barrel of benchmark U.S. crude jumped about 4%. Hamas’s top political leader Ismail Haniyeh died in a predawn airstrike in the Iranian capital early Wednesday, Iran and the militant group said, blaming Israel for a shock assassination that could escalate conflict in the region and potentially disrupt the flow of oil. There was no immediate comment from Israel.
In stock markets abroad, Japan’s Nikkei 225 rose 1.5% after the Bank of Japan raised its benchmark interest rate.
Indexes rallied 2.1% in Shanghai and 2% in Hong Kong after official data showed that China’s July China manufacturing activity contracted again, fueling expectations that Beijing will need to roll out more stimulus to counter a slowdown for the world’s second-largest economy.
Stock indexes also rose across Europe.
Earnings reports are important this week as four of the Mag Seven report and considering how soft they have been lately, if they do not do better on this, then there are going to be real problems with them going forward, and the lineup is as follows: yesterday – Dow component MSFT lower in addition to PINS, FSLR, ANET, LYV, INFA, MAR, BG while AMD, SBUX, EA, MDLZ, MTCH, FRSH, MA were higher; today – META, QCOM, CVNA, SHAK higher and ARM, LRCX, WDC, W, MRNA are lower; tonight - AAPL, AMZN, BKNG, Dow component INTC and MSTR; Friday – Dow component CVX plus XOM.
Economic reports will have: yesterday – June pending home sales rose by 4.8%, results of the latest Fed interest rate meeting at 2pm (see above); today – June construction spending fell by 0.3% weekly jobless claims rose to 249K, which was the highest in a year, July ISM Manufacturing Survey fell to 46.8 which was the lowest in a year; Friday – June jobs report for which the estimate is 180K versus last month’s 206K, June factory orders.
