.png)
May 22, 2025
Dow: 41,980
S&P: 5840
Nasdaq: 18,967
10-YR T-Note: 4.59%
Bitcoin: 110,000
VIX: 20.86
Gold: $3,311
Crude Oil: 60.70
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.
Special Comment – the next issue of Daily Market Notes will appear on Tuesday, May 27th. Have a nice holiday weekend.
After Tuesday’s loss following a six-day winning streak, the market got absolutely destroyed yesterday under the weight of pressure from the bond market, where Treasury yields climbed on worries about the U.S. government’s spiraling debt in addition to other negative concerns.
The Dow collapsed by 817 points down to 41,860 as KO was the only stock out of 30 that went a little positive.
The S&P got blasted by 95 points to 5844 as technology, financials, industrials and travel stocks got hit very hard. The Nasdaq sold off by 270 points to 18,872 as recently beloved TSLA came down after the interviews with its famous C.E.O. got repeated throughout the day, and for what purpose was that about? But believe it or not, there were a few bright spots as GOOG stayed strong, as NFLX eked out another gain after an early downgrade, APPW and GOOS did well also.
The Russell 2000 Index of small stocks also got sold off sharply after its recent gains for negative 59 points to 2046 and the VIX rose strongly on the awful showing in stocks.
Stocks had been drifting only modestly lower early in the day, after TGT and other retailers gave mixed forecasts for upcoming profits amid uncertainty caused by the President’s trade war.
Then around 1pm, things collapsed after the release of the results for its latest auction of 20-year bonds. In this auction, the U.S. government had to pay a yield as high as 5.047% to attract enough buyers to lend it a total of $16 billion over 20 years.
That helped push up yields for all kinds of other Treasurys, including the more widely followed 10-year Treasury. Its yield climbed to 4.59% from 4.48% late Tuesday and from just 4.01% early last month, which is a notable move in the bond market.
The 30-year Treasury yield jumped back above 5% and approached its highest level since October 2023.
Treasury yields have been on the rise in part because of concerns that tax cuts currently being proposed in Washington could pile trillions of more dollars onto the U.S. government’s debt. Concerns are also still brewing about how much Trump’s tariffs will push up on inflation in the United States.
The U.S. government’s bonds aren’t alone, and yields have been on the rise recently for developed economies around the world. That is partly because their governments are continuing to borrow more cash to pay their bills, while central banks like the Federal Reserve have cut back on their own holdings of government bonds.
When the U.S. government has to pay more interest to borrow money, that can cause interest rates to rise for U.S. households and businesses too, including for mortgages, auto loans and credit cards. That in turn can slow the economy. Higher yields can also make investors less inclined to pay high prices for stocks and other kinds of investments.
Moody’s Ratings became the last of the three major ratings agencies late last week to downgrade the U.S. government’s credit rating on concerns that it may be heading toward an unsustainable amount of debt.
TGT sank after the retailer reported weaker profit and revenue than analysts expected for the start of the year.
The company said it felt some pain from boycotts by customers. It scaled back many diversity, equity and inclusion initiatives early this year following criticism by the White House and conservative activists, which drew its own backlash. Perhaps more worryingly, it also cut its forecast for profit over the full year.
CRI, which sells apparel for babies and young children, sank 12.6% after cutting its dividend. The company made the move in part because of investments it anticipates making in upcoming years, as well as the possibility that it “may incur significantly higher product costs as the result of the new proposed tariffs on products imported into the United States.”
A growing number of companies have recently said tariffs and uncertainty about the economy are making it difficult to guess what the upcoming year will bring. Others, including WMT, have said they will have to raise prices to offset Trump’s tariffs.
U.S. stocks had recently recovered most of their steep losses from earlier in the year after Trump delayed or rolled back many of his stiff tariffs. Investors are hopeful that he will lower his tariffs more permanently after reaching trade deals with other countries.
Earnings are winding down for the first-quarter and the lineup is still heavy on retailers: yesterday – TOL higher and TGT, TSX, PANW, LOW, CRI lower; today - SNOW, AAP, ADI, BJ, RL higher, tonight - INTU, WDAY.
Economic reports will have: today – April existing home sales slipped by 0.5%, weekly jobless claims slipped to 227,000; Friday – April new home sales.
