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January 8, 2025
DOW: 42,720
S&P: 5945
Nasdaq: 19,484
10YR T-Note: 4.69%
Bitcoin:95,129
VIX: 19,00
Gold: $2681
Crude Oil: $74,38
Prices Current as of 9:53 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 strong showing on Monday to start the new week, things got ugly after a nominally higher start yesterday, as ostensibly two reports that resulted in higher bond yields put things sharply lower, as this pattern of extreme volatility in both directions has become the basic market scenario.
As a result, the Dow ended lower by 178 down to 45,528 led by selling in most of the stocks that had done better the day before, such as NVDA which fell apart after making a new high, AAPL, AMZN, CRM, SHW, GS, HD, MCD and MSFT. In the meantime, such laggards as AMGN, CVX, JNJ, MRK and PG did better.
The S&P also turned a nominally positive start into a downside disaster with a 66 point decline down to 5909 led by selling in the large technology issues while the Nasdaq really got blasted lower by 375 down to 19,489 on the really awful showing by the usual tech leaders as well including TSLA which has lost 19% from its yearly high.
The Russell 2000 Index of small stocks was lower by 17 to 2250 while the VIX went higher up to 17.82 as it looks like it wants to seek a more dramatic range due to the very volatile proceedings in both directions lately.
Stocks dropped under the weight of rising bond yields, which jumped after the release of the November JOLTS report which showed a gain of 8.1 million. The other report for the ISM December services index grew much faster than expected to 54.1 and the Prices Paid Index rose higher than expectations by 6.2%, the highest since 2023. Such positive reports could also keep up pressure on inflation, and it could make the Federal Reserve less likely to deliver the cuts to interest rates that investors want.
Expectations for fewer cuts to interest rates in 2025 had already been building for weeks, which sent longer-term Treasury yields upward. So have worries about other possible new policies, such as tax cuts, which could swell the U.S. government’s debt and likewise push yields higher. The yield on a 10-year Treasury climbed to 4.69% from 4.63% shortly before the release of Tuesday’s reports and from just 4.15% in early December.
What had been on track to set another all-time high in morning trading was NVDA, after its CEO introduced some new products and partnerships the night before. He talked up the potential for AI technology in robotics, among other opportunities for big growth.
But after Tuesday morning’s economic reports, which hit the market after its first half hour of trading, NVDA swung to a loss of 6.2% and became the heaviest weight on the S&P. This whopper of a decline resulted in negative situations in the other major heavyweights.
Helping to keep losses from getting worse was CTAS which rose 2% after making public its offer to buy its smaller rival, UniFirst, for $275 per share in cash.
CTAS said it first made that offer in November but has been unable to get UNF’s board to meet. UniFirst had rejected an earlier offer of $255 per share, which provides uniforms, restroom supplies, fire extinguishers and other products to businesses. UNF jumped by 21%, below Cintas’ offer price.
SSTK and GETY climbed after they announced they were merging to become a $3.7 billion visual content company to provide customers with a broader array of still imagery, video, music, 3D and other media.
GETY shareholders will own a slight majority of the combined company. Getty shares jumped 24%, while Shutterstock climbed 15%.
In stock markets abroad, some notable Chinese companies fell after the U.S. Defense Department made a list of companies it says have ties to China’s military. The announcement caused some of the companies to protest and say they will seek to have the decision reversed. Added to the list were gaming and technology company Tencent.
Earnings this week begin slightly for the 4Q with early-birds starting out: today – CALM higher; Thursday, when the market is closed for the President Carter memorial – KBH, STZ, WDFC, WBA; Friday – DAL.
Economic reports will see: yesterday – November JOLTS report rose to 8.1 million listings, ISM December Services report (see above), November trade balance widened to $78.25 billion; today – weekly jobless claims fell to 201,000; the Federal Reserve releases the minutes from its last policy meeting at 2pm, where it cut its main interest rate for a third straight time but hinted fewer reductions may arrive in 2025; Friday – December non-farms payroll report which is expected to show 160,000 and an unchanged unemployment rate of 4.2%, January preliminary U. of Michigan Consumer Sentiment Survey.
