Daily Market Notes | 5-minute read

May 3, 2024

By Donald Selkin | Chief Market Strategist
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 first time in three days, the market was able to hold onto its gains instead of collapsing into the close as it had done on Tuesday and Wednesday. In fact, there have been only nine times since 1985 when declines of this magnitude took place in the final 10 minutes of trading, so what happened on those two days was indeed extremely rare.

As a result, the Dow ended with a closing advance of 322 up to 38,225 led by AAPL ahead of its good report last night, BA, CAT, GS, UNH, all of which seem to be the upside or downside leaders as the case may be, plus AMZN, which finally had a nice day after its earnings report from earlier in the week.

The S&P finished 45 points up to 5064 which more than halved its drop for the week led by nice gains in most large technology stocks in addition to the financials.

The Nasdaq ended 235 points up led by the large tech stocks while the Russell 2000 Index of small stocks did well for a change on its own with a 35 point gain up to 2016.

Naturally on a higher day the VIX got sold down again to 14.68 as it stays in the wide-swinging range for months now.

In the bond market, Treasury yields eased ahead of today’s 8:30am jobs report which showed that there were 175,000 positions created, less than expected. The unemployment rate was 3.9% for the 27th straight month below 4% for the first time since the 1970s. Average hourly earnings gained 0.2%, which was also less than expected and the labor force participation rate was 62.7.

Earnings reports from several big companies helped drive the market higher. QCOM rose 10% after topping forecasts for profit and revenue in the latest quarter. The tech company also gave forecasted ranges for upcoming revenue and profit whose midpoints topped analysts’ expectations.

CVNA made a really high gain of 34% after the used-car seller reported much better results for the latest quarter than analysts expected, boosted by better-than-forecast sales.

MGM Resorts International rose after likewise topping forecasts for profit and revenue. It credited stronger traffic at MGM China, which ramped up as COVID-19 restrictions fell away in Macau.

And helping was none other than Dow giant AAPL which did well and added to its gains after the close which we will see in today’s session. Its iPhone sales decreased in China but it is raising its dividend and undergoing a huge share buyback.

These gains more than offset a 15% drop for ETSY, which only roughly matched analysts’ expectations for results and revenue. It cited a “still challenging” environment where customers broadly are more selective about the non-essentials they’re buying.

DASH sank by 10% after reporting a worse loss than expected as the company, which has been spending more on personnel and research and development, also gave a forecasted range for underlying earnings trends in the current quarter whose midpoint fell short of analysts’ expectations.

PTON hit a new all-time low after it said it would cut roughly 400 jobs as part of a program to save $200 million in annual costs and said that its C.E.O. is stepping down.

LIN was one of the heaviest weights on the S&P 500, sinking 5% despite reporting stronger results for the latest quarter than expected. Revenue for the industrial gases and engineering company fell short of Wall Street’s expectations, as did the midpoint of its forecasted range for earnings in the current quarter.

In the bond market, which has been helping to dictate much of the stock market’s movements recently, yields fell following some economic reports.

Weekly jobless claims came in slightly lower at 208,000 which is the latest signal that the job market remains solid despite high interest rates.

A separate, potentially more disappointing report suggested growth in how much U.S. workers produced per hour worked was weaker at the start of 2024 than economists expected. A measure comparing labor costs to productivity, meanwhile, rose by more than expected in the preliminary report. That could put upward pressure on inflation.

Stubbornly high readings on inflation this year are what pushed Federal Reserve Chair Jerome Powell to say on Wednesday that it will likely take “longer than previously expected” to get enough confidence about inflation to cut interest rates.

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