Daily Market Notes | 5-minute read

July 2, 2024

By Donald Selkin | Chief Market Strategist

DOW: 39163.53

S&P: 5482.26

Nasdaq: 17930.17

10YR T-Note: 4.45%

Bitcoin: 61955.15

VIX: 12.13

Gold: $2334.20 Crude Oil: $83.38

Prices Current as of 4:00 pm

Source: CNBC

40+ Years on

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.

Imagine how those who felt the need to unload such stocks on Friday like AAPL, AMZN, MSFT and AVGO, sending them to their lows very late in the session, felt today when all of them made terrific gains in yesterday’s session to lead the Nasdaq to a record-high close?

After a volatile session where the major indices swung between gains and losses, things sort of settled down a bit in the afternoon and as a result the Dow ended with a 50 point gain to 39,169 led by AAPL, MSFT, AMZN as mentioned above while JPM reached a new high, in addition to GS doing well and BA, of all things, did better as well.

The S&P also ended higher with a 14 point advance to 5475 as once again, the majority of stocks ended lower even though way more than half its components ended down, and this has been an occurrence lately, as the large-cap technology leaders continue to carry the upside load almost all by themselves.

The Nasdaq reached a record high with a gain of 146 to 17,879 as in addition to those mentioned above, TSLA finally provided some upside input as this one has been a real laggard this year.

And naturally, the Russell 2000 Index of small stocks did lag and ended lower by 17 to 2030 while the VIX took a new leg lower to 12.22 as overall volatility remains very low for the overall market.

Bond yields for some reason jumped as elections continue to drive swings in financial markets worldwide.

Some of the world’s strongest action was in France, where the CAC 40 index in Paris jumped as much as 2.8% before settling to a gain of 1.1%. Results now suggested that a far-right political party may not win a solid majority in the country’s legislative elections. That bolstered hopes for potential gridlock in the French government, which would prevent a worst-case scenario where a far-right with a clear majority could push policies that would greatly increase the French government’s debt.

This is a big year for elections worldwide, with voters heading to the polls in the U.K. later this week.

The bond market was home to some of U.S. markets’ strongest action. Treasury yields jumped again, as they did Friday immediately following the Biden-Trump debate. Besides pushing rates higher, traders also piled into stocks of oil-and-gas and financial companies.

The yield on the 10-year Treasury climbed to 4.46% from 4.39% late Friday and from 4.29% late Thursday. It’s a reversal of the general trend since the spring, when the 10-year Treasury yield had topped 4.70% in late April.

Yields had been largely easing on hopes inflation will slow enough to convince the Federal Reserve to cut its main interest rate later this year, down from the highest level in more than two decades.

Hopes for rate cuts held after a report on Monday showed that the June ISM Manufacturing Index fell to its lowest level since February at 48.5. Perhaps even more importantly, the report also said that price increases are decelerating. Taken together, the data could offer more of the evidence that the Federal Reserve wants to see of lessening pressure on inflation before it will cut rates.

This week’s economic highlight will likely arrive Friday, when the U.S. government will say how many workers employers hired during June. Economists predict overall hiring slowed to 190,000 from May’s 272,000.

At that level, the U.S. economy could continue to grow and avoid a recession without being so strong that it puts too much upward pressure on inflation.

And once again, we heard from none other than Keith Gill who caused the shares of CHWY to swing from a large early gain to a loss of 6.6% after he said that he ostensibly owns 9 million shares of the pet supply company. That’s about 6.6% of the entire company, according to a filing made Monday with the Securities and Exchange Commission and where does he get the money to buy so much stock? And sure enough, Ryan Cohen was the founder of this company so between this connection and the ones that he blurts about with GME, there appears to be this symbiotic relationship between these two. And once again, there was another huge loss for buyers of these out of the money calls for this one, now the third week in a row that this has taken place while the stock basically does nothing.

SPR rose by % after BA said it would buy the maker of fuselages and other airplane parts for $4.7 billion in stock. BA, which also rose, has been facing tougher scrutiny from the government and customers over worries about safety and quality as it previously owned the former, so the purchase reverses a longtime company strategy of outsourcing key work on its passenger planes.

And META had the last laugh from a lower start after E.U. regulators accused it of breaching the bloc’s new digital competition rulebook by forcing Facebook and Instagram users to choose between seeing ads or paying to avoid them.

In stock markets abroad, Japan’s Nikkei 225 added 0.1% after a quarterly survey by the Bank of Japan called the “tankan” showed a modest improvement in confidence among the country’s largest manufacturers. Stocks in Shanghai rose 0.9% following mixed economic data.

Economic reports will see: yesterday May Construction Spending fell by 0.1%, June ISM Manufacturing Survey eased to 48.5 which was the lowest since February; today - May JOLTS report unexpectedly rose to 8.14 million; Wednesday – May trade balance, May factory on-farms payroll report for which the prediction is 190K.

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