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November 1, 2024
DOW: 42,151
S&P: 5746
Nasdaq: 18,286
10YR T-Note: 4.35%
Bitcoin: 69,765
VIX: 21,94
Gold: $2751
Crude Oil: $69,79
Prices Current as of 09:59 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 Wednesday’s weak close, the market once again underwent a “high tech is high wreck” situation yesterday as the downside of high expectations thumped those stocks on Thursday, and MSFT and META dragged stock indexes lower despite delivering strong profits for the summer.
The Dow ended 378 points down to 41,763 hurt by declines in AAPL, BA, CRM, GS, MSFT on earnings and TRV’
The S&P took a huge downside beating of 108 points to 5705 walloped by the large technology members and the financials as well
The S&P sank 1.9% for its worst day in eight weeks and fell further from its record set earlier this month. The Nasdaq composite tumbled 512 points down to 18,095 for a complete collapse, or 2.8% for a second straight loss after setting its latest all-time high.
The Russell 2000 Index of small stocks also took a beating to 2197 while the VIX loved this action and moved higher to 23.16, right near its recent better levels.
MSFT reported bigger profit growth for the latest quarter than analysts expected. Its revenue also topped forecasts, but its stock nevertheless sank 6% as investors and analysts scoured for possible disappointments. Many centered on its estimate for upcoming growth in its Azure cloud-computing business, which fell short of some analysts’ expectations.
The parent company of Facebook, meanwhile, likewise served up a better-than-expected profit report. As with MSFT, that wasn’t enough to boost its stock. Investors focused instead on META’s warning that it expects a “significant acceleration” in spending next year as it continues to pour money into developing artificial intelligence and it fell by 4%.
Both these two items have soared in recent years amid a frenzy around AI, and they are entrenched among the most influential stocks. But such stellar performances have critics saying their stock prices have simply climbed too fast, leaving them too expensive. Therefore, it becomes difficult to meet everyone’s expectations when they are so high.
AMZN and AAPL also helped drag the market lower, with declines of 3.4% and 2% before they released their profit reports after trading ended for the day, with the former trading higher in the after-market and AAPL going further south.
Earlier this month, TSLA and GOOG started the Magnificent Seven’s reports with results that investors found impressive enough to reward with higher stock prices.
The lone remaining member, NVDA, will report its results later this month and its 4.8% drop was Thursday’s heaviest weight on the market after MSFT. Expectations are just as high for the chip company after its stock soared over 880% in the last two years.
The tumble for Big Tech on the last day of October wiped out the S&P’s gain for the month. The index fell 1% for its first down month in the last six, even though it set an all-time high during the middle of it.
Such a big move might have been overdue following an unusually long and placid run, as the S&P had failed to move by 1% in a day in either direction, without accounting for rounding, for the longest stretch in nearly three years.
Still, Thursday wasn’t a complete washout thanks in part to cruise ships and cigarettes.
NCLH steamed 6% higher after delivering stronger profit for the latest quarter than analysts expected. The cruise ship operator said it was seeing strong demand from customers across its brands and itineraries, and it raised its profit forecast for the full year of 2024.
MO gained 8% for another one of the S&P bigger gains after beating analysts’ profit expectations. The C.E.O. credited resilience for its Marlboro brand, among other things, and announced a cost-cutting initiative.
Oil-and-gas companies also rose after the price of a barrel of U.S. crude gained up to around $70 a barrel to recoup some of its losses for the week and for the year so far. COP gained 6%.
In the bond market, Treasury yields edged lower following a mixed set of reports on the U.S. economy.
The September P.C.E. said that the Federal Reserve likes to use slowed to 2.1% in September from 2.3%. That is almost all the way back to the Fed’s 2% target, though underlying trends after ignoring food and energy costs were a touch hotter than economists expected.
The personal income and spending report said that growth in workers’ wages and benefits slowed during the summer. That could put less pressure on upcoming inflation. A third report, meanwhile, said that only 216,000 workers applied for unemployment benefits last week. That is an indication that the number of layoffs remains relatively low across the country.
Treasury yields swiveled up and down several times following the reports before moving lower. The yield on the 10-year Treasury fell to 4.27% from 4.30% late Wednesday but that is still up sharply from the roughly 3.60% level it was at in the middle of last month.
Yields have been rising following a string of stronger-than-expected reports on the economy. Such data bolster hopes that the economy can avoid a recession, particularly now that the Fed is cutting interest rates to support the job market instead of keeping them high to quash high inflation. But the surprising resilience is also forcing traders to downgrade their expectations for how deeply the Fed will ultimately cut rates.
In stock markets abroad, indexes sank across much of Europe and Asia.
South Korea’s Kospi dropped 1.5% for one of the larger losses after North Korea launched a new intercontinental ballistic missile designed to be able to hit the U.S. mainland in a move that was likely meant to grab America’s attention ahead of Election Day.
This week will see five out of the Magnificent 7 companies reporting in addition to others and the lineup is as follows: yesterday – BKNG, CVNA, ETSY, DASH, RBLX, CTSH, MA, KTB, NCLH and MO higher while Dow components MSFT and MRK were lower in addition to META, COIN, HOOD, EBAY, ROKU, EL, UBER and MSTR; today – Dow components AMZN, CVX and INTC higher plus XOM while Dow component AAPL is lower.
Economic reports will see: yesterday - weekly jobless claims came in lower at 216K, September personal income and spending gained 0.3% and 0.5% respectively, September P.C.E. report rose by 0.2% and higher by 2.1% year over year; today October non-farm payroll report gained only 12,000 due to the BA strike and the horrendous flooding in the Southeast with the 4.1% unemployment rate remaining the same. Average hourly earnings rose by 0.4% and the average workweek stayed about the same at 34.3 hours. The labor force participation rate eased back to 62.6 hours.
The stock index futures are higher despite this low jobs number report and the question will be – can we go the distance instead of slipping as has been the pattern with AAPL acting as a real drag on further upside progress.
