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October 9, 2024
DOW: 42,309
S&P: 5774
Nasdaq: 18,256
10YR T-Note: 4.04%
Bitcoin: 62,114
VIX: 20,90
Gold: $2633
Crude Oil: $72,93
Prices Current as of 08:53 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 getting smoked to the downside on Tuesday on a number of technology downgrades from various brokerage houses, the market turned right around to the upside yesterday, proving that things are showing the ability to hold the higher levels in a fairly steady range.
The Dow gained 126 points to 42,080 led by comebacks in AAPL for a nice change after its downgrade from the day before, in addition to CRM, HON, MSFT for a change after its recent weakness plus TRV.
The S&P did much better with a strong 55 point advance to 5751 on the technology strength and it is astounding that this group can return to a better showing after the viciousness of the prior day downgrades, and the question then becomes – what did that strategy accomplish for those who sold on the lows?
And sure enough, it was the most picked-on group, namely the Nasdaq that put in the best showing with a very strong 259 point upside moonshot at 18,182 as NVDA is now developing its own upside momentum as it was one of the few stocks in this group that had the nerve to go higher even on Tuesday’s awful technology showing.
The Russell 2000 Index of small stocks was sort of a non-factor with a 2 point gain to 2195 while the VIX finally went a little lower to 21.42 as nothing in the Middle East was enough to cause additional worry for at least another day despite the anniversary of the one-year attack by Hamas against Israel. This lower VIX was also in response to energy prices going a little lower for a change.
The market here held firm even though stock markets around the world sank following scary swings in China, as euphoria about possible stimulus for the world’s second-largest economy gave way to disappointment as stocks tumbled by 9.4% in Hong Kong for their worst day since the 2008 global financial crisis.
Once again, a barrel of crude oil, the international standard, fell 4.6% to $77.18 for its first loss in a week and a half. A barrel of benchmark U.S. crude, meanwhile, eased 4.6% to $73.57.
That also helped level off the pressure on the stock market from the bond market. Treasury yields eased a bit, a day after they shot to their highest levels since the summer.
The 10-year Treasury yield edged down to 4.02 from 4.03% late Monday. The two-year yield, which more closely tracks expectations for what the Federal Reserve will do with overnight interest rates, slipped to 3.96% from 3.99%, late Monday, though still near its highest level since August.
When Treasurys are paying higher yields, investors generally become less willing to pay very high prices for stocks and other investments. And Treasury yields had been storming higher over the last week following reports showing that the U.S. economy remains healthier than expected.
Such reports, including one last week showing a much better September jobs situation than expected, raised hopes that the economy will avoid a recession. But they also force traders to ratchet back expectations for how much the Federal Reserve will cut interest rates by now as the perceived purpose has widened its focus to include keeping the economy growing instead of just fighting high inflation.
Traders have abandoned expectations for the Fed to cut its main interest rate by a larger-than-usual half of a percentage point at its next meeting, for example. Instead, they are largely betting on a traditional-sized cut of a quarter of a percentage point, according to data from CME Group. Some are even calling for the possibility the Fed could keep its main rate steady in November.
High Treasury yields put the most pressure on stocks seen as the most expensive, and that puts the spotlight on the Big Tech stocks that have led the market for most of the last few years.
On Tuesday, all of the Big Tech stocks that have collectively come to be called the “Magnificent Seven” rose. NVDA led the way with a gain of 4% and was the strongest single force pushing upward on the S&P.
PEP rose after delivering stronger profit for the latest quarter than analysts expected, though its revenue fell short.
On the losing were oil-and-gas companies, which gave back some of their big recent gains driven by the last week’s jump in crude prices. CVX was one of the main reasons the Dow lagged other indexes.
In stock markets abroad, trading in mainland China reopened following a national holiday. Before, indexes in Shanghai and Shenzhen had surged on hopes for stimulus from the government and the central bank meant to prop up the economy’s flagging growth.
On Tuesday, China’s economic planning agency outlined details of measures aimed at boosting the economy, but it refrained from major spending initiatives. That helped lead to the 9.4% drop for the Hang Seng index in Hong Kong.
In Shanghai, where the market had been closed as Hong Kong ran higher over the last week, stocks rose 4.6% following their reopening.
The disappointment in China had worldwide effects, knocking down stocks of companies in Europe, the United States and elsewhere that do lots of business in and around China. In addition to the high-tech Chinese companies such as BABA, BIDU, PDD and so on, EL and WYNN both sold off as well.
The third-quarter earnings season begins this week with the following: yesterday – PEP higher; Thursday – BLK, JPM, WFC.
Economic reports will have: yesterday – August trade deficit came in slightly above $70 billion; today – 2pm release of the minutes from the last F.O.M.C. meeting; Thursday – September C.P.I., weekly jobless claims; Friday – September P.P.I., U. of Michigan mid-October Consumer Sentiment Survey.
