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February 21, 2025
Dow: 43,950
S&P: 6,112
Nasdaq: 19,987
10-YR T-Note: 4.49%
Bitcoin: 98,800
Vix: 15.38
Gold: 2,949
Crude Oil: 71.95
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 ending higher on very late buying for the first three days this week, the euphoria finally came to an end big-time yesterday as the market got clocked sharply lower and was able to pull off its worst intraday levels but still ended badly down.
The Dow was the weak shower as WMT, which had done well this year to an all-time high, sold off sharply after its earnings report while the financials really got hit hard. As a result, it reached a miserable 677 points on the downside but was able to come off of those worst levels to finish down 450 to 44,176.
The S&P followed the same lower pattern with a sharp loss of 60 which then improved as well to end down 26 to 6117 as individual stocks such as PLTR sold off sharply for the second day in a row, in addition to huge losses in financials and WMT while some hope emerged with some gains in the three largest members with AAPL, NVDA and MSFT all doing better.
The Nasdaq also improved from a 261 point loss to end at 94 points lower to 19,962 with help from the last three members mentioned in the prior paragraph.
The Russell 2000 Index of small stocks had nothing going for it as it declined by 20 to 2261 on weakness in financials while the VIX ended higher at 15.66 which was lower than its sharper gain a point higher as stocks did improve from their worst levels as previously described.
WMT drove the market lower, even though the retailer reported stronger profit for the latest quarter than analysts expected. The retailing giant gave a forecast for upcoming profit that fell short of analysts’ expectations as shoppers across the country deal with still-high inflation and the threat of higher tariffs from the President.
The company is still forecasting growth in revenue for this upcoming year and said it has experience in navigating the effects of tariffs, but its profit outlook helped pull stocks lower across the retail industry, such as COST, AMZN and TGT.
PLTR was another weight on the market. It fell 5% to follow its 10% drop from the day before, after the U.S. Defense Secretary said that he wants to cut $50 billion in spending next year. The software company got 55% of its $2.9 billion in revenue last year from government customers.
Doing better on a difficult day was BAX which reported better profit for the latest quarter than analysts expected. It credited strength for its pharmaceuticals business, as well as for its medical products and therapies.
Burger chain SHAK gained 11% after likewise reporting a stronger profit than expected. The company said sales trends remained solid during the quarter, even though bad weather around the country and wildfires in the Los Angeles area kept some customers away.
Chinese e-commerce giant BABA saw its stock that trades in the United States climb 8% after showing stronger profit for the latest quarter than analysts expected. It also talked up its artificial-intelligence developments.
In the bond market, Treasury yields edged lower after a report showed more workers applying for weekly jobless claims than expected at 219,000. It is an indication the pace of layoffs could worsen, but the number still remains relatively low compared with history.
The January Philadelphia Fed Index rose to 18.1 as it said growth for manufacturing in the mid-Atlantic region is still doing well, but the prices paid component rose as well.
The yield on the 10-year Treasury fell to 4.50% from 4.54% late Wednesday. The yield on the two-year Treasury, which more closely tracks expectations for upcoming Fed moves, held steadier. It remained at 4.27%, where it was late Wednesday.
Trump has already given brief, 30-day reprieves for tariffs he had announced on Mexico and Canada to give time for more negotiations.
One comment about some groups of stocks that did very poorly such as the large banks and some high-flying AI stocks such as AXOM, APP, PWR, RDDT which had been flying to the upside recently. Not a word of complaint from the various “experts” about this, and then when they all collapsed yesterday, they all said that these declines were “justified” because the prices attained by them before yesterday were too high, so now the declines were correct. As has been a long-standing tradition, it is always correct to buy stocks that are going way higher and then when they decline largely, oh my goodness, they were not supposed to be so out of touch with reality.
Today the opening appears to be very mixed as the shares of UNH are being sold off sharply because of a report about their billing practices relating to health benefits which is dragging down the Dow while the other indices are indicated higher, which let us hope that they can maintain as the session moves along.
Fourth-quarter earnings season is winding down with the following reports this week: yesterday – Dow component WMT, in addition to CVNA, TOST, KVYO lower and CAKE, BABA, SHAK, HAS, U higher; today - XYZ, DBX lower and BKNG, TXRH higher.
Economic reports will see: yesterday – weekly jobless claims rose to 219,000, January Philly Fed Index rose to 18.1 with prices higher, January L.E.I. index which fell by 0.3% and was down by 0.9% for the prior six months and this was an improvement over negative 1.7% the six months before that; today – U. of Michigan final February Consumer Sentiment Survey.
