The Buzz on Business for June 21^st, 2024

Regular listeners will know that we’ve taken note in recent weeks of divergences of note in the stock market.

For example, we’ve seen:

• Stocks hitting new highs while volume falls.
• The indexes rally on a given day, but decliners lead advancing stocks.
• The NASDAQ and the S&P hit one new all-time high after another, while the Dow corrects over three percent.

We don’t want to overstate our case. Divergences like these, and others, happen all the time and can be both bullish and bearish. A divergence is hardly an end-of-world scenario. But, they often signal a reversal.

Well, we saw another divergence yesterday, one we haven’t seen thus far. The Dow rallied. Broadly. Twenty-three of the thirty Dow stocks saw gains on the day. Volume was excellent. But the rest of the market faltered, and declining stocks exceeded advancers once again.

What happened? That’s always a complicated topic but, increasingly, stocks rise and fall on the back of NVIDIA and NVIDIA, which is not a member of the Dow, fell over four percent.

Stock Market Report

As we said, stocks finished mixed as the market continues to narrow.

• The Dow Jones Industrials had a good day. They were up 300 points, that’s almost eight-tenths of a percent and closed at 39,135.
• Not so much the rest of the market. The S&P 500 was down fourteen points, or one quarter of one percent, and it closed at 5,473.
• The NASDAQ Composite had a tougher go of things. It was down eight-tenths or 141 points and starts the day today at 17,722.
• And the Russell 2000 also was off on the session. It closed at 2,017, down four-tenths or eight points.

Bond Market Report

Rates were likewise mixed but mostly higher.

• The yield on the 2-year treasury was up two basis points and it closed at 4.733%.
• The 20-year closed at 4.505%, that’s up five ticks.

Oil, Gold, and Bitcoin

• Oil has been in rally mode since OPEC announced it was increasing production. Don’t worry folks. Economics really does make sense. The rally continued Thursday. Oil was up $0.66, and a barrel now changes hands at $81.24.
• Gold was up $28.20, and a troy ounce will now set you back $2,372.40.
• And Bitcoin joined the trend. It was up $520.01 and at 4:00 PM ET stood at $65,015.77.

Economic News is Bad. Stocks Yawn

In the last two years or so, we’ve gone from good news is good news to good news is bad news, to bad news is good news and to bad news is indeed bad news. Thus far, we’ve avoided my favorite, the one that comes to my mind every time the phone rings: No news is good news.

Yesterday, the economic news was uniformly bad. Red numbers all over the Giant Quote Machine before the opening bell. The market’s reaction: A big yawn.

Still, these data are worth a look. The economic reports have been mixed in recent months, as the economy has moderated under higher for longer interest rates. Nothing mixed about Thursday.

• Building Permits came in below expectations and below last month.
• Housing Starts got crushed. Way below the forecast and last month.
• The Philly Fed Manufacturing Index was well below expectations and last month’s number. We expect nothing less from the Manufacturing sector.
• Likewise, the Atlanta Fed’s GDP Now report. Below expectations and below last month.
• The big news was Initial and Continuing Jobless Claims both of which came in above expectations.

No matter how you slice it, none of this is good. What’s interesting is the market’s non-reaction. Since a weaker economy helps make the case for rate cuts and rate cuts make stocks more valuable, we expected a rally, and we didn’t get one.

Today, we get more data out of the housing market and the manufacturing sector. We will do what we do, slice and dice all of it so we can report all of it to you tomorrow, here on the Buzz!