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July 18, 2024
DOW: 41,206.10
S&P: 5,576.54
Nasdaq: 17,901.80
10YR T-Note: 4.16%
Bitcoin: 63,820.00
VIX: 14.88
Gold: $2,464.00
Crude Oil: $82.51
Prices Current as of 10:50 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.
One of the more astounding features of yesterday’s session saw that for the S&P, which suffered its worst one-day downside shellacking since April, slightly more stocks in the index were higher than lower despite the fact that the index itself got slammed to the tune of a 79 point decline down to 5588!
Go figure that one out, as this is probably the first time in history that such an event took place, and once again, it shows that the Magnificent 7 stocks and other large technology stocks still dominate the index, and this relationship is coming more into line with the selloffs that these giants have undertaken in the past few weeks.
And by the way, the Dow reached a new all-time high in the process with a 243 point advance to 41,198 led by the familiar likes of AMGN, CVX, JNJ after earnings, JPM at a record high, MCD and UNH also at a record after its report as well.
Meanwhile the sad-sack of the day was the formerly high-flying Nasdaq, which got destroyed to the tune of a huge 512 points down to 17,996 due to the destruction of the leaders for the worst such showing since December 2022. Worries about potentially worsening trade tensions with China hit stocks of chip companies.
The mix offered a continuation of a recent trend that market watchers have called encouraging, one where more stocks are rising rather than just a handful of dominant elites. The smaller stocks in the Russell 2000 were coming off a big five-day winning streak on hopes that interest rates are about to get lowered and the U.S. economy will avoid a recession, though the index fell by 24 points back to 2239.
The market’s spotlight was squarely on chip companies, which tumbled after a report which said that President Joe Biden is considering the most severe trade restrictions available if companies like the Netherlands’ ASML and Japan’s Tokyo Electron continue to ship advanced semiconductor technology to China. The U.S. government has blocked Chinese access to advanced chips and the equipment to make them, citing security concerns, and urged its allies to follow suit.
ASML saw its stock trading in the United States drop 13% even though it reported sales for the spring that came in at the high end of its forecasted range. Shares of Tokyo Electron, meanwhile, dropped 7% in Tokyo to cut its gain for the year to 32.2%.
Another major chip company, Taiwan Semiconductor Manufacturing Co., sank after former President Donald Trump criticized the self-governed island claimed by Beijing, which the U.S. is obligated by treaty to defend if it is attacked. TSMC’s stock trading in the United States dropped 8%.
Some critics call those Magnificent Seven stocks too expensive, and investors are creeping back into unloved areas of the market. The economy has remained resilient so far, with the job market staying solid, and investors widely expect the Federal Reserve to begin cutting interest rates in September because inflation has eased back a bit.
JNJ, whose stock is down for the year so far, climbed 3.7% after topping analysts’ forecasts for profit in the latest quarter. It was one of the largest reasons the Dow Jones Industrial Average was able to rise despite drops of at least 1% for each of the Magnificent Seven stocks.
USB, which has also lagged the rest of the market this year, rallied 4.6% after topping analysts’ forecasts for profit and revenue.
On the losing side was FIVE, a retailer targeting teens and tweens with products priced at $5 or below. It tumbled 25% after its CEO stepped down from his job and from the board. It also gave a profit forecast for the second quarter that fell short of analysts’ expectations.
Sad sack SAVE lost 10% after the discount carrier cut its forecast for revenue in the second quarter. It said it is making fewer dollars than expected from fees outside of tickets.
In the bond market, the 10-year Treasury yield dipped to 4.14% from 4.16% late Tuesday.
In stock markets abroad, London’s FTSE 100 rose 0.3% after data showed that the inflation rate remained steady at the Bank of England’s 2% target in June. Indexes were mixed elsewhere across Europe and Asia.
The bulk of the second-quarter earnings season starts this week and the lineup is too long so we will list them two days at a time and yesterday we saw: yesterday – JBHT, IBKR, ASML, FIVE lower and Dow component JNJ plus BNY higher; today – DFS, STLD, UAL higher and DPZ, NVS, ALK lower; tonight - NFLX, CTAS, ISRG. Economic reports will see: yesterday – June housing starts rose to 1.35 million, June industrial production gained 0.6% and capacity utilization rose to 78.9, Fed Beige Book at 2pm said that the economy is on a slight to solid pace of growth; today – weekly jobless claims rose to 243K, June L.E.I. fell 0.2% July Philadelphia Fed Economic Outlook gained by 13.9.
