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June 16, 2025
Dow: 42,693
S&P: 6047
Nasdaq: 19,700
10-YR T-Note: 4.3%
Bitcoin: 107,674
VIX: 19.73
Gold: $3,412
Crude Oil: 71.79
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.
How many times have I mentioned that the VIX was too low in the 16/17 area for stocks to continue to proceed higher, and this is what we saw during Friday’s downside disaster, as the concern was that escalating violence following Israel’s attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy.
As a result, the Dow collapsed by 770 to 42,198 with 28 of its 30 members lower and it was financials that led the downturn. The S&P plunged by 68 to 5977 led by most technology stocks, although ORCL continued its strong earnings-related run from earlier in the week, and TSLA managed to eke out a small gain.
The Nasdaq got blasted for 255 points to 19,406 on tech weakness and the Russell 200 Index of small stocks came down hard by 39 to 2,100 on weakness in small banks. Meanwhile the VIX jumped up to 20.82 on what I said was it getting too low and the market temporarily overbought at the 16-17 level earlier in the week.
The strongest action was in the oil market, where the price of a barrel of benchmark U.S. crude jumped 7.3% to $72.98. Brent crude, the international standard, rose 7% to $74.23 for a barrel.
Iran is one of the world’s major producers of oil, though sanctions by Western countries have limited its sales. If a wider war erupts, it could slow the flow of Iran’s oil to its customers and keep the price of crude and gasoline higher for everyone worldwide.
Beyond the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz, a relatively narrow waterway off Iran’s coast. Much of the world’s oil that’s been pulled from the ground moves through it on ships.
Past attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later once it became clear that the situation was not escalating and there was no impact on oil supply.
That has investors waiting to see what will come next. U.S. stock prices dropped to their lowest points for the day after Iran launched ballistic missiles toward Israel.
For now, the price of oil has jumped, but it is still lower than it was earlier this year. “This is an economic shock that nobody really needs, but it is one that seems more like a shock to sentiment than to the fundamentals of the economy,” said one oil expert.
Companies that use a lot of fuel as part of their business and need their customers feeling confident enough to travel fell to some of the sharpest losses. Cruise operators and airline stocks did poorly as a result. But oil producers like CVX and XOM did well.
Contractors that make weapons and defense equipment also rallied, such as LMY, NOG and RTX all gained nicely.
The price of gold climbed as investors looked for safer places as it got up to over $3,400 an ounce.
Often, prices for Treasury bonds will likewise rise when investors are feeling nervous. That’s because U.S. government bonds have historically been seen as some of the safest options around. But Treasury prices fell Friday, which in turn pushed up their yields, in part because of worries that a spike in oil prices could drive inflation higher.
That sent the yield on the 10-year Treasury up to 4.41% from 4.36% late Thursday. Higher yields can tug down on prices for stocks and other investments, while making it more expensive for U.S. companies and households to borrow money.
A better-than-expected report Friday on sentiment among U.S. consumers also helped drive yields higher. The preliminary report from the University of Michigan said sentiment improved for the first time in six months after Trump put many of his tariffs on pause, while U.S. consumers’ expectations for coming inflation eased.
ADBE fell more than 5% even though the company behind Photoshop reported a stronger profit for the latest quarter than expected. Analysts called it a solid performance but said investors may have been looking for some bigger revenue forecasts for the upcoming year.
It says that since 1985, the S&P has averaged 3.6% gain during the three months after crude oil gains 5% or more in a single da, which is what happened on Friday and perhaps a reason that the market is going so well today.
Earnings this week include: tonight – LEN; Tuesday – JBL, LAZ; Friday – KMX, DRI, KR.
Economic reports will include: today – N.Y. State Empire Manufacturing Survey fell to -16; Tuesday – May retail sales, May capacity utilization and industrial production; Wednesday – F.O.M.C. decision at which they are largely expected to do nothing, May housing starts, weekly jobless claims; Friday – May L. E..I.
