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May 6, 2025
Dow: 41,040
S&P: 5620
Nasdaq: 17,715
10-YR T-Note: 4.35%
Bitcoin: 93,950
VIX: 24.3
Gold: $3,389
Crude Oil: 58.60
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.
I had said that the market looked a little tired during the Monday morning meeting, and sure enough it did as it broke a nine-day winning streak.
What was also an old-time situation was that when the Dow is higher and the Nasdaq lower, the market almost invariably follows the latter because of the much larger participation such as 3,000 to 30.
So we had the Dow higher by 97 points at 2:50pm while the Nasdaq was down by 20, and from that moment into the close, they both collapsed with the former changing that 97 point advance into a closing loss of 98, quite a severe comedown, while the Nasdaq turned that 20 point loss into a more severe one of 133, and once again the market does some peculiar things late in the session, in both directions and does anything fundamentally really change so late in the session?
So the Dow ended with that 98 point decline down to 41,218 led by selling in AAPL, AMZN once again after Friday’s poor earnings-related declines, in addition to CRM, CVX on further declines in oil prices to four-year lows and GS.
The S&P got smacked down to a 36 point late declines as well with AMZN, AAPL and the weaker energy stocks leading the way. The Nasdaq ended 133 lower to 17,844 on additional selling in TSLA, NFLX, which reached a record high last week, COIN and TSM.
The Russell 2000 Index of smaller stocks followed the other indices lower with a 16 point loss to 2004 while the VIX rose back up to 23.64.
The losses came amid a relatively calm day of mostly mixed trading. They follow several weeks of gains that helped the market wipe away its losses since the ongoing trade war began.
BRK fell 5%. Legendary investor Warren Buffett announced over the weekend that he would step down as C.E.O.at the end of the year after six decades at the helm. Buffett will still be chairman of the board of directors.
The OPEC+ group of eight oil producing nations announced over the weekend that it will raise its output by 411,000 barrels per day as of June 1st. Crude oil prices fell 2% to $57.13 per barrel. Many producers can no longer turn a profit once oil falls below $60. Prices are down sharply for the year over worries about an economic slowdown.
Markets have been absorbing the shock of tariffs and the growing trade war. The President has imposed import taxes on a wide range of imports, prompting retaliation from global trading partners. Many of the more severe tariffs that were supposed to go into effect in April were delayed by three months, with the notable exception of tariffs against China.
The delays have provided some relief to investors, though uncertainty about the impact from current and future tariffs continues to hang over markets and the economy.
That uncertainty will overshadow the Federal Reserve’s meeting on Wednesday.
The Fed is expected to hold its benchmark interest rate steady. cut the rate three times in 2024 before taking a more cautious stance. The central bank was concerned that inflation, while easing, was still stubbornly hovering just above its target rate of 2%. Concerns about inflation reigniting have only grown amid the global trade war sparked by Trump’s tariff policy.
The economy has shown some signs that it is feeling the impact from tariffs and the uncertainty over Trump’s policy. The U.S. economy shrank 0.3% in the first quarter, mainly due to the surge in imports to this country, marking the first drop in three years.
The economy is still showing signs of resilience, however. Consumers have grown more cautious, but still continue to spend. Economic activity in the services sector continued expanding in April, according to a survey from the Institute for Supply Management.
The services sector survey and the latest consumer confidence updates also reflect growing concerns over the economy’s direction. Trump’s rapidly shifting policies on trade have kept the Fed and markets on edge.
Tariffs have been imposed, only to be pulled or delayed, sometimes on a daily basis. The on-again-off-again approach has left businesses, households and economists at a loss in trying to forecast where the economy might be headed and planning accordingly.
The latest salvo in the trade war from Trump came Sunday night in a post when he said that he has authorized a 100% tariff on movies that are produced outside of the U.S. The impact is unclear, as it is common for films to include production at multiple locations around the world.
Shoemakers posted gains following the announcement that SKX is being acquired for $0 billion and taken private by the investment firm by 3G Capital.
Skechers jumped 24%, while CROX and DECK, which owns the Ugg and Teva brands, rose as well.
Treasury yields rose. The yield on the 10-year Treasury rose to 4.35% from 4.31% late Friday.
Earnings continue this week with the following lineup: today – CLX, MAT, HIMS, PLTR lower; F and MAR higher; tonight - AMD, DUK; Wednesday – Dow component DIS plus UBER; Thursday – AKAM, COIN.
Economic reports will see: today – March trade deficit rose to $140.5 billion; Wednesday – F.O.M.C. fed rate decision, at which they are expected to keep the funds rate unchanged at 4.25% to 4.5%, and let us see the criticism that follows this one; Thursday – weekly jobless claims.
