Daily Market Notes | 5-minute read

May 22, 2024

By Donald Selkin | Chief Market Strategist

DOW: 39,789

S&P: 5315.5

Nasdaq: 16,829.21

10YR T-Note: 4.42%

Bitcoin: 70420

VIX: 12.20

Gold: $2393.1

Crude Oil: $77.84

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.

Another day, another dollar as after a lower start for the major indices, they continued to grind higher and in the process new records for both the S&P and Nasdaq were attained.

After the huge selloff to start the week, the Dow began with a 28 point decline and then turned positive in mid-morning to end with a 66 point gain to 39,872 led by advances in some of the stocks that got clobbered the day before, such as GS, JPM and UNH, in addition to IBM and MSFT. It now sits just below the 40,000 record it set last Friday.

The S&P also started lower by 11 and then also proceeded to turn around to the upside with a 13 point gain to 5321 and a new record high itself with the three largest components leading the way with MSFT, AAPL and NVDA gaining again as the latter will release its all-important earnings report after today’s close.

The Nasdaq added to its record gains from the prior day and really made a nice turnaround after a 75 point opening loss to finish 37 points ahead to its best ever level at 16,832 led by the three aforementioned leaders plus TSLA, COST and LRCX which announced a 10 for 1 split in its shares.

The Russell 2000 Index of small stocks ended 4 points lower at 2098 on weakness in some of the regional banks while the VIX continues to plummet and is now down to 11.86 for the lowest in three years and now the next downside objective is the long-term support level of 10.

Indexes have risen to records recently largely on expectations for the Federal Reserve to hopefully cut interest rates later this year as inflation hopefully cools. More reports showing big U.S. companies earning better profits than expected have also boosted the market.

One retailer that did well was M, which joined the number of companies delivering a stronger profit for the latest quarter than analysts expected, and its stock jumped 5% following some early fluctuations. The company, which runs Bloomingdale’s in addition to its namesake stores, raised the bottom ends of its forecasts for upcoming sales and profit.

LRCX also helped support the market after the supplier for the semiconductor industry announced a program to buy back up to $10 billion of its own stock. The company said it will undergo a 10-for-one stock split, which would bring down each share’s price and make it more affordable to investors.

That helped offset a 3.7% drop for PANW as the cybersecurity company delivered a better profit report than expected, but it gave a forecasted range for revenue in the current quarter whose midpoint was a hair below analysts’ expectations.

DJT, the company behind Donald Trump’s Truth Social network, sank 8.7% after disclosing a net loss of $327.6 million in its first quarterly report as a publicly traded company.

LOW fell despite reporting better results for the latest quarter than analysts had feared. It said it is maintaining its forecast for revenue this year, including a dip of up to 3% for an important underlying sales figure as high interest rates keep a lid on customer activity.

Rates for mortgages, credit cards and other payments have become more expensive because the Federal Reserve has been keeping its main interest rate at the highest level in more than two decades. It is trying to pull off a tightrope walk where it grinds down on the economy just enough through high interest rates to snuff out high inflation but not so much that it causes a painful recession.

The C.P.I. report released last week showing that inflation may finally be heading down a bit following a discouraging start to the year raised hopes that such a “soft landing” for the economy may be possible. It also strengthened hopes that the Federal Reserve will cut its main interest rate once or twice this year.

A top Fed official, Gov. Christopher Waller, said in a speech Tuesday that he’s expecting to see moderation in economic data after reports recently came in weaker than expected on sales at U.S. retailers and on the strength of U.S. services businesses. That in turn should help put downward pressure on inflation.

But he said that he would “need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy,” unless the job market weakened significantly before then.

Hopes for coming cuts to rates have sent Treasury yields lower, which eases the pressure on the stock market. The yield on the 10-year Treasury slipped to 4.41% from 4.48% late Monday. The two-year yield, which more closely tracks expectations for Fed actions, slipped to 4.83% from 4.85%.

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: yesterday - PANW, ZM, TRIP, AZO, LOW, DJT lower and M higher; today – TOL, URBN, ADI, TJX higher and TGT lower; tonight – NVDA plus SNOW; Thursday – BJ, INTU, RL and WDAY.

Economic reports will have: today – April existing home sales fell by 1.9%,release of minutes from last Fed meeting at 2pm; Thursday – weekly jobless claims, April new home sales; Friday – April durable goods orders, final May U. of Michigan Consumer Sentiment Index.

Expert Wealth Management Solutions

Discover how our personalized wealth management services can help you achieve your financial goals.

We're committed to serving you

Get in touch

How can we assist you today? Let us know what services you are interested in.

1200 North Federal Highway
Suite 400
Boca Raton, Florida, 33432
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.