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August 12, 2024
DOW: 39,468.68
S&P: 5,362.27
Nasdaq: 18,629.72
10YR T-Note: 3.94%
Bitcoin: 60,617.80
VIX: 19.01
Gold: $2458.15
Crude Oil: $78.42
Prices Current as of 11:30 am
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.
After a manic week that began with Japanese stocks falling to their worst loss since 1987’s Black Monday, which was then followed on Thursday by the market putting in its best performance since 2022, things sort of calmed down on Friday to get the major indices almost back to where they began the week.
The S&P ended the week down by only 0.4%, the Dow was off by 0.6% while the Nasdaq ended off by 0.2% which mean that the S&P and Nasdaq are now lower for four straight weeks. This follows the historic pattern of the first two weeks in July being the best of the year, and then going into a tailspin after that.
The Dow gained 51 points to 39,497 led by AAPL, which made a nice comeback from the lows of 202 when I spoke about it during last Monday’s meeting and it ended at 216, in addition to AXP, GS, MSFT and CRM.
The S&P gained 25 to end at 5344 while the Nasdaq advanced by 85 to 16,795. The Russell 2000 did nothing while the VIX continued to go lower as it should down to 20.37. This was after that panic yet unsustainable trade as high as 66 to start the week on Monday’s plunge in stocks.
The gains pulled the S&P back within 5.7% of its all-time high set last month, after it had sunk nearly 10% below that record during the week. It was a vicious return of volatility for a market that had been rising smoothly, as that VIX got to its highest level since the 2020 COVID crash. Worries are still high about the strength of the U.S. economy, and reports are due this week on inflation, sales at retailers and other measures of strength.
But on Friday, at least, the mood was one of calm after more big U.S. companies joined the pile reporting better profit for the spring than analysts expected.
EXPE jumped 10% after delivering stronger results than forecast, though it saw a softening of demand in July like some other companies. TTWO rose 4% after the company behind the Grand Theft Auto and NBA 2K video games likewise reported better results than expected.
Earlier in the day, indexes rose for many other stock markets worldwide. They have also been frenetic since last week because of a number of factors slamming together at once. At the forefront is the value of the Japanese yen, whose sudden and sharp strengthening recently forced hedge funds and other traders to scramble out of the old yen carry trade.
The strategy was to borrow Japanese yen at very low cost and then invest it elsewhere around the world. But a hike to interest rates by the Bank of Japan forced many to abandon the trade at the same time and sent global markets reeling. A promise by a top Bank of Japan official in the middle of the week not to raise rates further as long as markets are “unstable” helped stabilize the yen.
Also weighing on the market is the question of whether the Federal Reserve has kept interest rates too high for too long in order to beat inflation. The recent jobs report showing much weaker hiring by U.S. employers than expected was the lowlight.
Such worries dragged Treasury yields lower in the bond market, and they fell again Friday. Yields sank as investors looked for safer places for their money and as expectations built for deeper cuts to rates coming from the Fed. The yield on the 10-year Treasury fell to 3.94% from 3.99% late Thursday.
After seemingly getting the Bank of Japan to stop hiking rates for now, the goal of many investors now appears to be bossing the Fed into big rate cuts.
Reports this week could drive more swings for the market. On Thursday we will get July retail sales which is expected to show a slight gain and also the weekly jobless claims hopefully will show a continued decline.
Looming over them all will be the latest updates on inflation. A worst-case scenario would be if Tuesday’s and Wednesday’s inflation reports (C.P.I. and P.P.I.) show higher-than-expected rises in prices at the wholesale and consumer levels, while the week’s other reports show a weakening of the economy.
A third factor that sent markets spinning recently is increased skepticism about the rush into artificial-intelligence technology, and how much profit growth it will really produce.
The frenzy around AI allowed a handful of Big Tech stocks to drive the S&P to dozens of all-time highs this year, even as high rates weighed on other areas of the market. But this group lost momentum last month amid criticism investors got carried away and took their prices too high.
Earnings for the second-quarter come to an end this week with the following: Tuesday – Dow component HD; Wednesday – CAH, CSCO; Thursday – Dow component WMT plus BABA, TPR, AMAT and DE.
Economic reports will have: Tuesday – July P.P.I.; Wednesday – July C.P.I.; Thursday – weekly jobless claims, July retail sales, July industrial production and capacity utilization; Friday – July housing starts and mid-month July U. of Michigan Consumer Sentiment Survey.
