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July 25, 2024
DOW: 40,117.63
S&P: 5,446.61
Nasdaq: 17,365.58
10YR T-Note: 4.23%
Bitcoin: 64,718.23
VIX: 17.37
Gold: $2,363.5
Crude Oil: $77.8
Prices Current as of 11:39 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.
Years ago, there was a prominent market commentator and radio personality who would say on a downside disaster like we saw yesterday – “High tech is high wreck!” and boy was this old statement true as the market took a historic downside beating.
As a result, the Dow got clobbered for a 504 point decline down to 39,853 with AAPL, AXP, BA, CRM, GS, MSFT with a huge loss and V leading the sorry state of this index.
The S&P fell for the fifth time in six days, as did the Nasdaq, with a humungous 128 point downside shellacking to 5427 as the large technology issues, financials and industrials led the downside.
And the booby prize went to the Nasdaq with an astounding 655 point wipeout which was its largest such downside disaster since October 2022 as the technology stocks got blasted for a historic downside collapse.
Even the Russell 2000 Index of small stocks got caught up the selling with a 48 late downside collapse to 2195 as restaurant stocks sold off sharply due to the 28% wipeout in French fried potato supplier LW.
And the VIX really loved this horrible market action with a large upside move to 18.04 which was the highest since last April.
The downside villains were TSLA, whose awful showing was no surprise after GM and now F reported a terrible report after the close. And GOOG was no help either after it did terribly as well. These two former high-fliers set the negative tone for the entire Magnificent Seven group.
The profit reports from those two were not disasters, but they raised questions among investors about which other market heavyweights’ springtime results could also fall short of expectations.
TSLA tumbled 123% after reporting a 45% drop in profit for the spring, and its earnings fell short of analysts’ forecasts. It had become one of Wall the most valuable companies not just because of its electric vehicles but also because of its AI initiatives, such as a robotaxi, which is a tough business to assign a value to.
At GOOG, investors’ patience with the company’s big AI investments may also be running thinner as it declined by 5% even though it delivered better profit and revenue for the latest quarter than expected. Analysts pointed to some pockets of weakness underneath the surface, including weaker growth in advertising revenue for YouTube than expected. They also said increased AI investments and other spending could crimp how much cash it generates.
The larger challenge for it may have simply been how much its stock has already rallied, nearly 50% in the 12 months through Tuesday, on expectations for continual growth.
The hope is that if momentum does flag for the Magnificent Seven, more stocks outside them can rise to support the market. Conditions may be improving at the right time. Hopes for imminent cuts to interest rates have helped smaller stocks in particular to flip the market’s leaderboard and jump in recent weeks.
Smaller stocks had been jumping as Treasury yields eased on expectations that inflation is slowing enough for the Federal Reserve to begin lowering its main interest rate in September.
Treasury yields were mixed Wednesday after preliminary data suggested U.S. business activity is back to shrinking in manufacturing, though continuing to grow in services industries.
The yield on the 10-year Treasury rose to 4.28% from 4.25% late Tuesday.
T was a bright spot for the stock market, rising 5% after its profit for the latest quarter matched analysts’ expectations. MAT jumped 10% after topping expectations for profit, aided by growth for its Fisher-Price and Hot Wheels lines.
The problem for Wall Street is that even if more stocks were to rise, they’ll need to do so by more than Big Tech stocks are falling because of how much influence that small group carries.
Outside of Big Tech, LW collapsed by 28% for the worst loss in the S&P and its worst loss ever after the supplier of French fries and other frozen potato products reported weaker profit for the latest quarter than expected. The company said fewer diners visited restaurants during the spring than it expected. It also warned challenges could continue into its upcoming fiscal year because of softer demand due to “menu price inflation.”
In stock markets abroad, indexes slumped across Europe and Asia.
France’s CAC 40 index fell 1.1% as shares of luxury giant LVMH dropped 4.7% in Paris after the owner of Louis Vuitton and Dior reported quarterly sales that missed expectations.
Earnings this week will see (one day at a time due to so many): yesterday - today – TSLA, GOOG, MSCI, BSX, TMO, LW and Dow component V lower and TXN, MAT, STX, T, GD, FI, ENPH, CSGP, NEE higher; today – Dow component IBM plus NOW up HAS, REX higher and F, CMG, Dow components DOW, HON plus AZN, EW, ABBV, NFS lower.
Economic reports will have: yesterday – June new home sales slipped 0.2% today – weekly jobless claims, slipped to 235K, initial June durable goods orders were lower by 6.6% but excluding transportation orders were slightly higher, first look at 2Q G.D.P. came in at 2.8% and the inflation component was slightly less than expected; Friday – July personal income and spending, July final U. of Michigan Consumer Sentiment Survey and the always important June P.C.E. inflation report.
