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August 2, 2024
DOW: 39,425.68
S&P: 5,306.27
Nasdaq: 18,336.72
10YR T-Note: 4.22%
Bitcoin: 63,617.80
VIX: 26.91
Gold: $2423.15
Crude Oil: $73.42
Prices Current as of 11:00 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 the historic rally on Wednesday and a higher start yesterday, things turned around to the downside in one of the most vicious sessions this year, as the major indices collapsed once again during this tumultuous time in the markets.
For instance, the Dow went from a higher start to a collapse of 494 down to 40,397 with large losses in BA, CAT, GS, CVX, TRV, and JPM leading the downside way despite the plunge in interest rates as the 10-year Note fell to its lowest level since February at under 4%.
The S&P started out with a gain of as much as 44 points before it also underwent a vicious decline of 76 down to 5445 led by the collapse once again of the large technology stocks and the industrials, financials, and so on while the Nasdaq underwent the same downside torture of a 405 destruction to 17,194 after it had been higher earlier as well.
And even the mighty Russell 2000 Index of small stocks took it on the chin with its largest collapse since February with a 68 point selloff down to 2188 so the selling was an equal opportunity destroyer as there was none of the small-cap, large-cap discrepancy.
The VIX really loved this downside equity day with a new move higher to 18.59 after being above 19 for the first time since late last year.
So just a day after rallying on hopes that the Federal Reserve is about to cut interest rates, weak economic data raised worries that the Fed may have missed its window to do so and now has to wait until the next Fed meeting in September to finally do something, and talk about being behind the curve, so to speak.
The ISM Manufacturing July report showed a decline down to 46.8 to the lowest in a year and this area has been hurt badly by the persistence of high interest rates. Then you had June Construction Spending off by 0.3% and finally the number of weekly jobless claims rose to 249,000 which was the highest in a year.
Stocks tied to the economy’s strength such as energy and industrials fell the most which was indicative of the situation just described above.
The weak economic numbers raise the stakes for an already highly anticipated employment report coming today, which showed that the situation yesterday would have been worse if not for a strong report from META as the company behind Facebook and Instagram climbed 4.8% after reporting profit and revenue for the latest quarter that topped analysts’ expectations.
Other technology companies got a less welcoming reception from investors. ARM Holdings delivered better profit and revenue for the latest quarter than expected, for example. But its U.S.-listed shares nevertheless tumbled 16% because the U.K. chip company did not increase its forecasts for revenue and profit this fiscal year, despite its strong numbers.
In the bond market, as mentioned above, the yield on the 10-year Treasury slumped to 3.97% from 4.04% late Wednesday and from 4.70% in April.
Across the Atlantic, the Bank of England cut interest rates for the first time since the onset of the COVID-19 pandemic in early 2020. The FTSE 100 in London fell 1% after erasing an earlier gain, and stock indexes were also weaker across much of Europe and Asia.
Japan’s Nikkei fell by 2.5%. A day earlier, the Bank of Japan raised interest rates, a move that helps push up the value of the yen against the U.S. dollar. Such swings can hurt the profits of exporters, and Toyota’s stock tumbled 8.5% in Tokyo Thursday even though it reported a profit gain.
Earnings results showed that META, CVNA, SHAK were higher and ARM, LRCX, WDC, W, MRNA were down; today - Dow components AMZN, INTC, AAPL and INTC lower in addition to BKNG, W, SNAP, MRNA, HSY, CTSH, DKNG while ROKU, COIN, CLX are higher.
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 was negative as it came in at 114,000 which was the slowest in four years, the unemployment rate rose to 4.3%, the highest since October 2021 and average hourly earnings rose by 0.2% and year over year gained 3.6%. This report is interpreted as weak and bond yields are declining again, and this resonated with the fact that the Fed missed the boat and now should lower rates now.
