The Buzz on Business for August 26th 2024

Last week, we spent some time on this podcast looking at and disagreeing with Vice President Kamala Harris’ economic plan, specifically, her plan to fight high prices in housing and groceries. We were critical of the Harris’ plan, thought it to be counter-productive and that it would most certainly lead to higher prices for home buyers, for renters and for grocery shoppers.

In theory and in practice, prices controls and subsidies are dumb ideas.

You know what else is a dumb economic idea? Tariffs. Both political parties have embraced tariffs, while mouthing the platitudes of free trade—free trade provided it is fair trade—but President Trump has made tariffs, and economic and cultural isolationism, more generally, a centerpiece of his economic agenda.

And again, this is a really bad idea.

We have, up until now, hesitated to delve too deeply into political topics because people at all points on the political spectrum listen to podcasts and our personal political philosophy reduces to “a pox on both your houses.” But we believe that the plans articulated by both presidential candidates, if implemented, would hurt the economy, the markets and your investments.

So, we’re going to take a look at the Trump plan over the course of the next week or so as events permit. We hope you’ll join us.

Stock Market Report

A new all-time intraday and closing high for the Dow, did not pull the rest of the market higher with it. Stocks finished mixed, mostly lower, on narrowing breadth and falling volume.

• The Dow Jones Industrials were up just 0.20% or 65-points but that was enough for a new all-time closing high as they closed at 41,241.
• Not so much the S&P 500. It was down 0.30% or 18-points and closed at 5,617.
• Worries about NVIDIA’s earnings report due out tomorrow weighed on the tech sector. The NASDAQ Composite was down 152-points, that’s 0.90% and it closed at 17,726.
• The small caps were in positive territory all day. All day until the last ten minutes that is. The Russell 2000 finished the day off a minuscule 1 point. Less than one point actually! Basically flat. And it closed at 2,218.

Bond Market Report

Rates were up across the board on Monday but not by much.

• The yield on the 2-year treasury was up less than 2 ticks and it closed at 3.938%.
• The 20-year was up 1 tick, and it stands at 4.196%

Oil, Gold, and Bitcoin

• Oil was up sharply on concerns about Mideast tensions. Although it seems to us that those tensions have been around awhile. Regardless, oil was up $2.29, and a barrel now changes hands at $77.15.
• Rates were up, so was gold down? Nope! Gold closed at a new all-time high of $2,553.70, up $7.10.
• And Bitcoin was off $271.46 and at 4:00 PM ET stood at $63,362.26.

Little on the Economic or Earnings Calendars So Far but NVIDIA and PCE on Tap

Not much on either the economic or earnings calendars on Monday. Durable Goods orders surprised to the upside. The Atlanta Fed’s Snap GDP Now Report came in just as the market expected. Neither seemed to be on the minds of traders.

Today we get the Case Shiller Index of Home Prices. Estimates are the the average house increased in value by 6.9% in the last year

Tomorrow is NVIDIA’s second quarter earnings report which seems to have the market on edge. We’ll be watching.

But the big news this week is inflation! The PCE complex rolls out on Thursday and Friday. Expectations are that Core PCE inflation increased by 0.20% in July.

That number could move the market!

Everyone here at the Ministry of Truth will be pawing through all of the tea leaves so we can report all of it to you, here on the Buzz!