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July 19, 2024
DOW: 40,665.68
S&P: 5,544.50
Nasdaq: 17,871.92
10YR T-Note: 4.21%
Bitcoin: 64,257.80
VIX: 16.03
Gold: $2397.95 Crude Oil: $82.38
Prices Current as of 9:15 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.
I assume that we are now in the traditional period after the best two weeks of the year which takes place in the first part of July and then becomes choppy from mid-July through mid-October and finally does well from that time until the end of the year.
Yesterday was a perfect example of this as the major indices began higher and then turned around to put in a completely awful performance as the Dow got slammed for a large loss of 533 points to 40,655 hurt by declines in the very same stocks that had done well earlier in the week such as the large financials such as JPM, AXP, GS and then UNH in addition to HD, CAT and so on.
The S&P also got clocked to the tune of 43 points to 544 after horrible showings from its largest components AAPL, AMZN and MSFT in addition to most of the largest technology components as well.
The Nasdaq, which got decimated to its worst loss since December 2022 on Wednesday, did a little “better” with a decline of “only” 125 down to 17,871 as two of the larger stocks that were flying upward earlier in the year but who have come down awfully lately decided to dig in their heels and actually had the nerve to end higher, namely NVDA and AVGO.
And the recently beloved Russell 2000 Index of small stocks also went lower for the second day, as it fell by 41 down to 2198. This decline came after its incredible recent run higher by jumping more than 1% for five straight days until Tuesday. The VIX continues to love this and closed up to just under 16 as it was moving higher earlier in the week even when things were doing better. The majority of stocks within the S&P fell after giving up gains from earlier in the day. The sharpest loss came from DPZ which dropped 14% despite topping analysts’ expectations for profit in the spring.
The pizza chain temporarily suspended its forecast for how many stores will open globally over the long term. While that is likely due to reasons beyond the company’s control, analysts said it could frustrate investors.
DHI, the company behind Olive Garden, LongHorn Steakhouse and other chains, sank 3%. It said it would buy the Chuy’s Tex-Mex chain in an all-cash deal valuing it at $605 million. Chuy’s stock jumped 47.8%.
Stocks of chip companies stabilized a bit after tumbling a day earlier amid worries about potentially worsening tensions with China. U.S.-traded shares of TSM rose slightly after the industry giant reported stronger profit for the latest quarter than analysts expected. It bounced back from its loss of 8% the prior day, but only after moving between gains and losses.
The shift away from the large technology stocks over the last week has resulted in investors not piling into them. Instead, investors moved toward smaller stocks, companies whose profits are closely tied to the economy’s strength and other areas that have been unloved for a while.
The momentum kicked into a high gear after the latest C.P.I. report raised expectations for the Federal Reserve to start easing interest rates in September. Lower rates and a solid U.S. economy could mean bigger benefits for smaller companies than for Big Tech giants, which rose almost regardless of such factors.
Among them, the job market and economic growth would need to sustain modestly over the next few months and inflation would have to continue to cool. In the meantime, more than a third of the smallest stocks remain unprofitable.
In the bond market, Treasury yields rose following some mixed data on the economy. Weekly jobless claims gained by 243,000 to the highest level since last August, which could be a signal of a softening job market, though the number remains low compared with history.
On the other hand, the July Philadelphia Manufacturing Report jumped to 13.9 which was the highest in three months.
The yield on the 10-year Treasury rose to 4.19% from 4.16% late Wednesday.
Besides hopes for coming cuts to the Fed’s main interest rate, which has been sitting at its highest level in more than two decades, expectations for stronger corporate profit growth have also helped drive stocks.
DHI jumped by 10% for the largest gain in the S&P after the homebuilder reported stronger profit and revenue for the spring than analysts expected. Other homebuilders also rallied as a result, including a 2.5% rise for PulteGroup and a 2.1% climb for Lennar.
In stock markets abroad, European indexes were mixed after the European Central Bank held its main interest rate steady.
Earnings reports showed: yesterday - DFS, DHI, CTAS, UAL higher and DPZ, NVS, ALK, DHI lower; today - ISRG, NFLX higher and Dow component AXP lower.
Economic reports had: yesterday - weekly jobless claims rose to 243K, July L.E.I. slipped by 0.2% and the Philly Fed Manufacturing Survey gained to 13.9 which was the highest in three months.
