Daily Market Notes | 5-minute read

May 10, 2024

By Donald Selkin | Chief Market Strategist

DOW: 39,532

S&P: 5228

Nasdaq: 16,374

10YR T-Note: 4.49%

Bitcoin: 62554

VIX: 12.9

Gold: $2376.7

Crude Oil: $79.5

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.

After a hesitant opening, the major indices zoomed higher as the Dow has now risen by seven straight sessions as it continues its longest such streak this year with a strong gain of 331 up to 39,387. It was led in this endeavor by AMGN, CAT, GS and HD and these are the same names that appear on the winner’s list every day, so to speak.

The S&P gained 25 to 519 to pull itself within 1% of its all-time high following a rough April. It was led by gains in financials, energy and most of the high-tech leaders with NVDA taking the day off as it approaches its high at around 965.

The Nasdaq sort of followed along with AMZN reaching its best-ever level and many of the tech stocks doing well again while the Russell 2000 Index of small stocks kept moving up with 18 points to 2073.

And how about that VIX, which fell down to 12.69 as it approaches its very strong support level at 12.4 and let’s see if this area is going to stop the upside or whether it can break through and propel the major indices even higher.

There was no real major motivating upside factor aside from the weekly jobless claims which showed a gain of 231,000 which was the most since last August and this was interpreted as a sign that the economy can pull off a hoped-for balancing act of staying solid enough to avoid a bad recession, but not so strong that it puts upward pressure on inflation. Treasury yields erased earlier gains immediately after the report’s release, an indication of expectations for the Federal Reserve to deliver long-sought cuts to interest rates later this year.

Elsewhere, some stocks swung sharply following their latest earnings reports as EQIX  jumped by 12% after reporting stronger profit for the latest quarter than analysts expected. The company, which runs data centers around the world, also said an independent investigation led by its board found no accounting inconsistencies or errors that would require financial restatements. Earlier, an investment firm had accused it of “major accounting manipulation.”

YETI gained 13% after reporting better profit for the latest quarter than expected thanks to stronger sales for its drinkware and coolers and equipment. It also raised its forecast for full-year earnings per share. Like other companies, it is plowing cash into buying back its own stock, which boosts per-share profit for existing investors.

CAKE gained 6% after topping expectations for profit. The results were encouraging following some recent warnings by big food and drink companies about how much pressure their customers, particularly the lower-income ones, are feeling.

ABNB dropped 7% despite topping expectations for profit and revenue. It gave a forecasted range for revenue in the current quarter whose midpoint fell short of what analysts expected. It said an earlier Easter pulled more of its business this year into the first quarter from the second quarter.

BYND, the maker of plant-based meat substitutes, fell 14% after it posted a much worse loss than analysts expected as demand continued to crater. It hit an all-time low in the process.

In the bond market, the yield on the 10-year Treasury eased to 4.45% from 4.50% late Wednesday. The two-year yield, which more closely tracks expectations for the Fed, slipped to 4.81% from 4.84% late Wednesday.

A smooth auction of 30-year Treasury bonds helped to keep yields stable.

Treasury yields have largely been easing since Fed Chair Powell said last week that the central bank remains closer to cutting its main interest rate than hiking it, despite a string of higher inflation rates this year. Add to this the cooler than expected jobs report last Friday suggested that the economy could manage to avoid being either too hot or too cold.

It could take a while for inflation in the United States to cool all the way back to the Federal Reserve’s target, even with the Fed’s main interest rate at its highest level in more than two decades. Economists at S&P Global Market Intelligence slightly downgraded their forecasts for U.S. economic growth in 2025 and 2026, which they said could allow inflation to settle at the Fed’s target on a sustained basis by 2027.

In stock markets abroad, indexes rose in London and other markets in Europe after the Bank of England hinted it may soon cut its interest rate from a 16-year high.

In Asia, indexes were mixed. They climbed 1.2% in Hong Kong and 0.8% in Shanghai after China reported its exports rose 1.5% in April from a year earlier, while imports jumped 8.4%. The renewed growth suggests a stronger recovery

in demand than earlier data had suggested.

Earnings this week include: yesterday  – ABNB, ARM, RBLX, WBD lower while HOOD is higher; today - AKAM, YELP, AKM, U, FROG lower and DBX, EQIX higher.

Economic reports will have: yesterday – weekly jobless claims rose to 231K which was the highest since last August; today - preliminary U. of Michigan Consumer Sentiment Survey.

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