Buzz on Business for Friday, January 5, 2024

Another tough day for stocks as Apple gets another downgrade. A tough day for bonds as rates rose, mostly across the board. But a very good day for the economy. We will get to all of it, and we’ll especially get caught up on all the economic news we’ve kind of ignored with all of the excitement this week.

Apple was hit with another downgrade by; I don’t know who, over the “me too” claim that iPhone sales are coming in below expectations. Apple is one of a handful of companies that are members of the Dow Jones Industrials, the S+P 500, and the Nasdaq Composite. So, when Apple sneezes. . .

Stock Market Report

• • Speaking of the Dow, it was the lone bright spot on Thursday, if a gain of three-one-hundredths of a percent can be considered a “bright spot!” It was up a minuscule ten points. But hey! A win is a win! It closed at 37,440.

• • The S+P 500 was down three-tenths. It, and the rest of the market had been up, most of the day but sold off into the close. It closed at 4.689, off sixteen points.

• • The Nasdaq Composite was off six-tenths. It closed at 14,510, down82 points.

• • The RSP and the SOXL were both down, two-tenths of a percent and 2.6% respectively.

Bond Markets

• • The two-year Treasury closed with a yield of 4.385%, up five basis points.

• • The yield on the twenty-year was up eight ticks and closed at 4.309%

Oil and Gold

• • Oil was down, but the chart still looks bullish to us. It closed at $72.36, down fifty-seven cents a barrel.

• • Gold was up $8.00 and will now set you back $2,050.80 a troy ounce.

Market Shakeout: When Weak Hands Fold, Buy Signals Emerge.

The correction deepened on Thursday, but it looks like a pretty conventional retracement to us, at this point. When a market rallies as hard as this one did in November and December, it attracts a lot of new money that got in around the top. These are called “weak longs.” When a market turns, as this one has, these investors give up—capitulate—often slowly then all at once. When the selling stops, markets can turn up again.

In ten years, when the Dow is somewhere between sixty and eighty thousand, this dip will be little remembered except, perhaps, as a missed opportunity. To us here at World Headquarters, as long as the fundamentals remain sound, this is nothing to worry about.

Beneath the Market Noise, Strong Economic Numbers

And there is nothing particularly unsound about the economic reports that have come out so far in the new year.

Let’s run down the list.

So, the stock market took a breather on Thursday despite good economic data. Apple was downgraded again, contributing to the Nasdaq Composite falling the most. But, the Dow managed a small gain, and there is reason to believe this pullback is a normal correction after the rally of November and December.

PMI, job openings, and GDP estimates are evidence that the fundamentals remain strong. Nerves may be jittery for some, but we don’t see it that way here at the Buzz on Business. We think there is an excellent chance that this dip is a buying opportunity—like most dips indeed are. With more data coming out tomorrow, including the December unemployment rate, the Buzz will keep a close eye on the market’s next move. Remember to tune in again for all the latest financial news and analysis!