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August 9, 2024
DOW: 39,417.22
S&P: 5,321.05
Nasdaq: 16,639.00
10YR T-Note: 3.94%
Bitcoin: 60,105.11
VIX: 21.69
Gold: $2,468.9
Crude Oil: $76.91
Prices Current as of 12:37 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.
Well, well, well – after three days of huge volatility to start the week, the market literally exploded to the upside yesterday, as the weekly jobless claims reports came in lower than expected, with a gain of 233,000 which ostensibly showed that the labor market was not as weak as had been predicted following a huge gain of 249,000 last week which was the most in a year.
As a result, the Dow jumped by a huge 683 points to 39,446 as only pathetic DIS went a little lower and how about this – the best gain was from INTC which rose by 7% from historically depressed levels.
The S&P put in its best gain since 2022 with an astounding advance of 120 to 5319 led by everything while the Nasdaq rose by 464 to 16,110 also led by everything.
The Russell 2000 Index of small stocks gained 49 to 2084 so it was an equal opportunity gain day for everything and the market was especially vulnerable to an upside after that strange late selloff on Wednesday for no ostensible reason.
And how about the VIX, which I said that reached an unsustainable level of 66 in the early morning on the panicky Japanese yen situation and as I had correctly pointed out, this was known as a “Bag Job” which means maneuvering a market to unsustainable levels to scare people out of their positions and which does not last too long. This sort of reminds me a few months ago when that “Roaring Kitty” fellow proclaimed that he had supposedly bought tons of shares of GME which pushed the stock into the 70’s where it had no business being there and it since has collapsed to a more reasonable price in the 20’s. Again, these sorts of maneuvers are done with the express purpose of forcing people to close out positions at losses as the fundamentals do not justify prices at these levels.
As mentioned, it was exactly a week ago that higher than expected weekly jobless claims helped enflame worries that the Federal Reserve has kept interest rates at too high of an economy-slowing level for too long in order to beat inflation. This sent markets reeling, along with a rate hike by the Bank of Japan that sent shockwaves worldwide by messing up a favorite trade among some hedge funds, which involved buying the cheap Japanese yen to invest in other currencies and stocks.
At the worst of it, at least so far, the S&P was down nearly 10% from its all-time high set last month. Such drops are regular occurrences, and “corrections” of 10% happen roughly every year or two. After Thursday’s jump, the index is back within about 6% of its record.
Still, the market’s swings look more like a “positioning-driven crash” caused by too many investors piling into similar trades and then exiting them together, rather than the start of a long-term downward market caused by a recession.
They say it looks more similar to the “flash crash” of 2010 than the 2008 global financial crisis or the 2020 recession caused by the pandemic.
Of course, markets have been quick to turn over the past week regardless of any long-term predictions.
In the meantime, big U.S. companies continue to turn in profit reports for the spring that are mostly better than analysts expected.
LLY jumped 9.5% to help lead the market after it delivered stronger profit and revenue than had been expected. Sales of its Mounjaro diabetes treatment and its Zepbound weight-loss counterpart are booming, and the company raised its financial forecast for the year.
Big Tech stocks also rose to claw back some of their sharp losses from the last month after a handful of them almost singlehandedly drove the S&P to dozens of all-time highs this year, the group known as the Magnificent 7 lost momentum last month amid criticism their prices soared too high in investors’ frenzy around artificial intelligence technology.
How this handful of stocks performs carries extra impact on the S&P and other indexes because they are by far the market’s most valuable companies. NVDA, which has become the poster child for the AI trade, rose 6% to trim its loss for the week so far to 2.1%, and it was the day’s strongest single force pushing upward on the S&P.
They helped offset a drop of 11% for MKC, which topped analysts’ expectations for profit in the latest quarter but fell short on revenue. It said growth slowed in its medical-surgical business.
BMBL, the Texas-based dating app, lost more than a quarter of its value, 29%, after its forecast for revenue in the third quarter came in well below expectations.
In the bond market, the yield on the 10-year Treasury rose to 3.99% from 3.95% late Wednesday.
In stock markets abroad, indexes were mixed across Asia and Europe. In Japan, which has been home to some of the wildest moves in global markets, the Nikkei 225 ticked down by 0.7%. That looked like a ripple following its tidal swings of down 12.4% and up 10.2% to start the week.
Earnings reports had yesterday: OXY, LLY, EXPE, DDOG, Z, FOUR higher and MNST, BROS, WB, BMBL, FSLY lower; today - TTWO, TTD higher, EXPE and SG, and CPR lower.
Economic reports will see: yesterday – weekly jobless claims came down to 233,000 which is initially resulting in a better market opening and a historic upside session.
