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August 8, 2024
DOW: 39,331.85
S&P: 5,297.06
Nasdaq: 16,566.47
10YR T-Note: 3.99%
Bitcoin: 59,060.41
VIX: 24.80
Gold: $2,454.3
Crude Oil: $76.14
Prices Current as of 11:33 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.
Yesterday’s horrible comedown from a really strong start was another example of the downside turmoil that investors have had to live with lately since the major indices topped out a month ago.
As an example, the Dow went from a 400 point morning advance to a close of down 234 in what has to be a horrendous backbreaker for the bulls. The declines were led by two stocks that did poorly on earnings, namely AMGN and that awful DIS, in addition to 3M and UNH.
The S&P did even worse as a strong 90 point morning gain turned into a closing decline of 40 to 5200 with most of the large technology stocks ending negative (at least AAPL) held up for a change. Ditto for the Nasdaq which saw a 343 point early gain become a closing decline of 171 down to 16,196 while the Russell 2000 Index of small stocks ended lower by 29 down to 2035 and is now negative for the year.
And naturally, the VIX got as low as 21.97 on the market highs but actually ended with a slight gain up to 27.85 as this one has swung all over the place recently, from the unsustainable 66 point gain early Monday morning.
As an example, former market darling NVDA went from a morning gain of around 4 points to a closing decline of 5 as this group has been struggling the last month on worries their prices shot too high amid the frenzy around artificial intelligence technology.
A profit report from SMCI, whose stock more than quadrupled in less than three months to start the year, helped further mark the excitement around AI. Even though its revenue soared 143% in the latest quarter, profit for the company that sells server and storage systems used in AI and other computing fell short of analysts’ heightened expectations and for its troubles its stock tumbled by 20%.
Still, other signals in the market showed less fear than in prior days when sharp losses cascaded globally. The S&P had come off a 1% rally that had broken a three-day losing streak where it tumbled a bit more than 6%, the worst since 2022.
Several reasons were likely behind the slide for markets worldwide, and one of them centered in Japan seems to be calming. The Bank of Japan raised its main interest rate a bit last week in a small move that sent aftershocks worldwide. This scrambled a favorite trade among some hedge funds and other investors, who borrowed money for very cheap in Japanese yen and then invested it elsewhere around the world.
Speaking to business leaders in the northern island of Hokkaido, the deputy governor of the Bank of Japan, acknowledged the recent market turmoil, which was also triggered in part by concerns about the slowing U.S. economy. Japan’s central bank can afford to wait, he said, and “will not raise its policy interest rate when financial and capital markets are unstable.” He also said he believed the U.S. economy would have a “soft landing” and avoid a recession, even if fears have risen that the Federal Reserve has kept interest rates too high for too long.
The Japanese promise offered a calmness for markets, nervous about additional moves by the Bank of Japan, which only recently ended its yearslong campaign to keep interest rates below zero.
But it also highlights how risks may remain, suggesting there’s still room left for the popular “carry” trade to unwind and that some hedge funds and other investors may still remain with this trade.
Japan’s rate hike last week sent the value of the Japanese yen soaring, and the resulting exit of investments by those hedge funds accelerated market declines, including Monday’s collapse for the Nikkei 225 which was its worst since the Black Monday crash of 1987.
Treasury yields tumbled sharply Monday, when fear in the market was spiking and investors were speculating the Federal Reserve may even have to call an emergency meeting to cut interest rates quickly, but they have stabilized since then.
The yield on the two-year Treasury was holding steady at 3.99% Wednesday, where it was late Tuesday.
The expectation on Wall Street is for the Fed to cut its main interest rate at its next scheduled meeting next month by either the traditional quarter of a percentage point or a more severe half of a point.
In the meantime, earnings reports from the biggest U.S. companies continue to roll in, and the growth for those in the S&P index may end up being the best since 2021, according to FactSet.
DIS delivered stronger earnings for the latest quarter than analysts expected, and its streaming business reported a profit for the first time. But its stock nevertheless fell 4.5% after it warned recent softness it saw at its U.S. theme parks could continue for “the next few quarters.”
ABNB tumbled by 13% after its profit in the second quarter fell short of analysts’ expectations, and it told investors that it saw some signs of slowing demand in the U.S.
Earnings saw the following – yesterday: Dow components AMGN and DIS lower, in addition to SMCI, NVO, TRIP and ATGE while RL, SHOP and FTNT were higher; today – OXY, LLY, EXPE, DDOG higher and MNST, BROS, WB, BMBL, FSLY lower; tonight – GILD, TTWO, TTD
Economic reports will see: today – weekly jobless claims came down to 233,000 which is initially resulting in a better market opening and let us see if we can go the distance, unlike yesterday.
