Daily Market Notes | 5-minute read

May 21, 2024

By Donald Selkin | Chief Market Strategist

DOW: 39,850

S&P: 5311.5

Nasdaq: 16,796.21

10YR T-Note: 4.41%

Bitcoin: 69856

VIX: 12.14

Gold: $2431.1

Crude Oil: $78.84

Prices Current as of 11:50 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.

Well, easy come, easy go – as after the Dow reached a new round number of 40,000 last Friday, it began the day higher and got to a mid-morning gain of 74 points before selling in a number of issues, namely the recently strong financials, turned things around in this one and it ended with a large decline of 197 to 39,806. The downside culprits were JPM in particular on some negative comments from its C.E.O. and the intimation that he was going to retire, in addition to other financials such as GS, TRV plus HD, MCD and UNH, all of which had done well lately.

The S&P escaped this sort of selling but did end well below its all-time intraday high of being ahead by 22 points in mid-morning as well before it eased back to a closing advance of 5308 led by nice gains in its three largest components – MSFT, AAPL and NVDA which reports tomorrow after the close and this one will be extremely closely monitored and could influence the entire market one way or the other. The S&P close pulled it to within 0.2% of its record close from last week.

The Nasdaq did the best of all with a final advance of 109 to a new record high of 16,794 led by the three aforementioned winners plus NFLX and AVGO. The Russell 2000 Index of small stocks also gained with 7 points to 2102 while the low VIX managed to come back a little from a three-year low to end slightly higher at 12.15.

The cruise liners did well as NCLH gave financial forecasts for the year that topped analysts’ expectations. It said demand is growing for cruises, and some of its competitors gained as well, such as CCL and RCL.

The big event as already mentioned is the earnings report from NVDA, whose rocket ride amid a frenzy around artificial-intelligence technology has been a major reason for the S&P’s gains over the last year and analysts are forecasting its revenue more than tripled to $24.59 billion from a year earlier. Its stock climbed 2.5% to bring its gain for the year so far to 91.4%.

Several retailers are also on the schedule and TGT sank after it said it would cut prices on thousands of everyday essentials such as milk and diapers, in an acknowledgment of how customers are looking for relief from higher prices.

In the oil market, crude prices eased modestly as they erased earlier gains from overnight trading following the death of Iran’s president in a helicopter crash.

In the bond market, yields ticked a bit higher as the 10-year Treasury rose to 4.44% from 4.42% late Friday. The two-year yield, which more closely tracks expectations for Fed action, ticked up to 4.84% from 4.83%.

The Federal Reserve on Wednesday will release the minutes from its latest meeting, where it again held its main interest rate at the highest level in more than two decades. The hope is that the Fed can manage the delicate balancing act of grinding down the economy through high interest rates by just enough to get inflation under control but not so much that it causes a painful recession. Traders are putting an 88% probability on the Fed cutting its main interest rate at least once this year, according to data from CME Group.

The first-quarter of 2024 earnings season is just about over, with retailers continuing to bring up the rear and the schedule for this week is as follows: today PANW, ZM, TRIP, AZO, LOW lower and M higher; tonight - TOL; Wednesday – the big one this week, namely NVDA plus ADI, SNOW, TGT and TJX; Thursday – BJ, INTU, RL and WDAY.

Economic reports will have: Wednesday – April existing home sales, release of minutes from last Fed meeting; Thursday – weekly jobless claims, April new home sales; Friday – April durable goods orders, final May U. of Michigan Consumer Sentiment Index.

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