Daily Market Notes | 5-minute read

June 25, 2024

By Donald Selkin | Chief Market Strategist

DOW: 39133.65

S&P: 5465.62

Nasdaq: 17,705.45

10YR T-Note: 4.25%

Bitcoin: 61865.00

VIX: 13.15

Gold: $2332.90

Crude Oil: $81.33

Prices Current as of 11:56 am

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.

For the third session in a row, we saw the spread between the Dow and the Nasdaq narrow in again as the shares of NVDA hit a brick wall after its incredible upside run this year.

The Dow advanced by another large amount with a 250 point gain to 39, 411 led by strong gains in its two largest influential high-priced leaders, namely GS to a new record and UNH, and these were helped by CVX.

Meanwhile the Nasdaq got clocked on the downside for 192 points led by, as mentioned above, NVDA in addition to MSFT, AMZN, AVGO, ASML and MSTR. It was the worst session for this index since April.

The S&P reached a 20 point morning advance but got messed up by those issues mentioned above and slid into the close for a 16 point decline to 5448, but for those historians out there, this was the 335th session without a 2% decline for this index, which dates back to February 21, 2003. This is still short of the longest such streak ever which was an incredible 949 days from May 2003 through February 2007.

The Russell 2000 Index of small stocks showed a gain of 8 to 2030 helped by gains in some smaller banks while the VIX inched up to 13.33.

And if things continue the way they are going so far today, this pattern will be reversed with Nasdaq higher and Dow lower.

Stocks of oil-and-gas companies were among the market’s strongest, as seven out of every 10 stocks in the S&P rose. XOM climbed 3%, and oilfield services provider SLB gained 4% as oil prices hung near their highest levels since April.

Financial companies were also strong. JPM added 1.3%, and WFC climbed 1.6% ahead of results coming later in the week for tests by the Federal Reserve of how big banks would fare in a recession.

But declines for a handful of high-profile stocks offset all of those gains, and the spotlight shone brightest on NVDA’s 6.7% tumble. It was a third straight drop for the chip company, which had rocketed 1,000% higher since the autumn of 2022. NVDA’s stock has been receding since it briefly overtook MSFT as the most valuable last week, and it’s down nearly 13% in just three days. Because Nvidia has become so massive in size, the movements for its stock carry extra weight in the S&P and other indexes and it was the heaviest weight by far on the S&P yesterday.

Other AI beneficiaries also gave up some of their fantastic gains. SMCI er dropped 8.6% to shave its gain for the year so far back below 200%, down to 190.9%.

Such a rotation among stocks could actually be a healthy sign for the market, as long as it can stay close to its records. Market watchers have been worried to see just NVDA and a handful of other companies responsible for much of the S&P’s returns recently. They would prefer a market where many stocks are participating in the gains.

RXO jumped 23% after it agreed to buy the Coyote freight brokerage business from UPS for nearly $1.03 billion. RXO said the deal will make it North America’s third-largest provider of brokered transportation. UPS, which bought Coyote in 2015 for $1.8 billion, rose 1.5%.

In the bond market, Treasury yields eased a bit. The yield on the 10-year Treasury fell to 4.23% from 4.26% late Friday.

It has been mostly falling since topping 4.70% in late April, which has relaxed the pressure on the stock market. Yields have sunk on hopes that inflation is slowing enough to convince the Federal Reserve to reduce its main interest rate later this year.

Investors are hoping for a slowdown in the economy, one that will take upward pressure off inflation and push the Federal Reserve to cut rates, which could happen as soon as September if inflation reports like the P.C.E. report coming out on Friday follow the recent pattern of easing back a little as did the recent C.P.I. and P.P.I. reports earlier this month.

The Fed just needs to make sure it cuts interest rates at the right time. If it waits too long, the economy’s slowdown could careen into a recession. If it’s too early, inflation could re-accelerate.

Earnings this week will have: today – CCL higher; tonight - FDX; Wednesday – GIS, MU and PAYX; Thursday – Dow component NKE and WBA. Economic reports will see: today – June Consumer Confidence rose to 100.4; Wednesday – May new home sales; Thursday – weekly jobless claims, May durable goods orders, latest look at 1Q G.D.P.; Friday – May P.C.E., final U. of Michigan Consumer Sentiment Survey.

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