Daily Market Notes | 5-minute read

June 18, 2024

By Donald Selkin | Chief Market Strategist

DOW: 38,808.32

S&P: 5,481.51

Nasdaq: 17,847.03

10YR T-Note: 4.23%

Bitcoin: 64,441.30

VIX: 12.57

Gold: $2343.32

Crude Oil: $81.14

Prices Current as of 12:00 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.

Same old, same old story as after a lower start, the market followed the recent pattern of ending higher as both the S&P and Nasdaq achieved further record high closes once again.

The Dow actually had the nerve to begin with a 157 point decline before turning around in the late morning to finish with a gain of 189 up to 38,778 led by AAPL (and what else is new?), AMGN, AXP, GS, HON and MSFT (and what else is new with this one as well).

The S&P began with a brief 11 point loss and then proceeded on its merry way with a 41 point advance to its highest level yet at 5473 led by the big 3 as AAPL, MSFT And NVDA now control 20% of the S&P which is the first time in history that this has occurred. It has now made 30 new highs with less than half a year to go.

The Nasdaq also turned a fast 50 point decline into a strong closing advance of 168 led by in addition to the big 3 just mentioned, red-hot AVGO, NFLX, META, ADSK, SMCI and lagging TSLA did well, while the Russell 2000 Index of small stocks got dragged along for the upside rise with a 15 point gain to 2022.

The VIX actually had the nerve to gain a bit up to 12.75 on a strong day like this and the reason is that for whatever dynamics are taking place here, it is respecting that near-term support level of 12.40 and is sort of becoming meaningless during this entire upside run of late as it shows no interest in making a definitive mood in either direction.

ADSK jumped 6.5% for one of the market’s biggest gains after an investment firm said it will try to delay the software company’s annual meeting so it can nominate new directors for the board. Starboard Value also outlined how it says the company hasn’t performed as well financially as it should have. In response, ADSK said it will review Starboard’s suggestions but added that it has “a clear strategy that is working.”

Close behind was chip company BRCM which rose 5% to add to gains from last week after it reported better profit than expected and said it would undergo a 10-for-one stock split on July 12th to make its price more affordable. This one has followed NVDA, the company that has become the poster child of investor frenzy around artificial-intelligence technology and just executed a similar split.

Continued momentum for Big Tech stocks, along with easing pressure on inflation, has investors “cheering the ‘glass half full’ outlook” instead of focusing on the struggles of lower- and middle-income Americans and other challenges.

And just to show how some market “experts” just follow the market along, one of the largest and most prestigious firms has now raised its S&P target three times higher this year as it sort of follows things along instead of just making a prediction and just staying there.

SMCI, which sells server and storage systems used in artificial intelligence and other computing, leaped 5% to bring its gain for the year so far to a staggering 212% and is also part of the supernova around AI that’s been overshadowing almost everything else in the investment world.

The gains for tech helped offset pressure on the stock market caused by rising Treasury yields in the bond market. The climb in yields erased some of the slack created last week when better-than-expected reports on inflation raised hopes that the Federal Reserve will cut interest rates later this year.

The June New York State Empire Manufacturing Survey said manufacturing in New York state is still contracting, lower for the seventh straight month, though not by as much as economists expected. Manufacturing has been one of the areas hardest hit by the Federal Reserve’s zeal to keep its main interest rate at the highest level in more than two decades.

The Fed is trying to hold rates high for long enough to slow the economy and snuff out high inflation, but it wants to cut rates and reverse the momentum before the slowdown evolves into a recession.

One stock that got clobbered was none other than GME, which sank by 12% following its annual shareholder meeting. The stock has been soaring and sinking as it rides waves of enthusiasm by smaller-pocketed investors. At the meeting, CEO Ryan Cohen said the struggling video game retailer will focus on cutting costs, which would involve a “smaller network of stores.” And the huge losses imposed on buyers of what would become worthless out of the money calls continued yesterday with 70,000 purchases of almost impossible to reach 125 calls for this Friday just illustrates the Pied Piper mentality of those who choose to follow a self-imposed “genius” whose every word is treated like an all-knowing person who has caused at least $100 million in losses for their troubles over the past two weeks and is set for another disaster for these holders this week as well if things do not change with 3 days to go.

In the bond market, the yield on the 10-year Treasury climbed to 4.28% from 4.22% late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.76% from 4.71%.

In stock markets abroad, European indexes calmed somewhat following last week’s rout as France’s CAC 40 rose 0.9% following its worst week in two years on worries that potential electoral losses by the president’s centrist party could lead to sharply higher debt for the country.

The modest gains for Europe followed losses in Asia. Japan’s Nikkei 225 dropped 1.8%.

Earnings this week will see: today – LEN lower; Thursday – DRI, JBL, KR, WGO; Friday – KMX, FDS.

Economic reports are: today – May retail sales rose by 0.1% but ex-autos were lower by 0.1%, May industrial production and capacity utilization; Thursday – May housing starts, weekly jobless claims; Friday – May existing home sales, May L.E.I.

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