Buzz on Business for Friday, January 19^th, 2024

On Wednesday, strong economic news on Consumer Spending pushed stocks lower as traders worried if the data would cause the Federal Reserve to postpone long-anticipated and desperately hoped-for rate cuts.

Yesterday, strong economic news from the Labor and Housing sectors seemed to propel stocks higher.

Today? You tell me!

Stock Market Report

• The Dow Jones Industrials had a good day. They were up 202 points, that’s over one-half of one percent, and they closed at 37,469.
• The S&P 500 was up nine-tenths of a percent or forty-two points. It starts the day today at 4,781.
• The Nasdaq Composite was up 200 points, 1.4%! It’s back above 15,000 and closed at 15,056.
• The RSP was up five-tenths. The SOXL was up a stout ten percent on the day.

Bond Markets

Rates were up, as you might expect, but not by much.

• The 2-year treasury closed, yielding 4.355%, that’s up about a tick.
• The yield on the 20-year was up five basis points and closed the day at 4.492%

Oil and Gold

• Oil was up but still in the trading range it's been in since mid-December. It closed at $73.80, up $1.13.
• Gold was up $15.10, and a troy ounce will now set you back $2,021.60.

Manufacturing Slump, Housing & Labor Surge: A Tale of Three Sectors in the US Economy.

The housing market, usually very interest rate sensitive, continues to exceed expectations.

• Building permits came in at a 1.495 million rate in December. Economists had predicted 1.48 million.
• Likewise, Housing Starts were strong.1.460 million versus expectations of 1.426 million.
• Initial Jobless Claims were expected to come in at 207,000. We got 187,000 instead.
• Continuing Claims also surprised positively. They came in at 1.806 million versus expectations of 1.845 million.

Good news from the labor market, indeed.

Manufacturing, not so much. The Philly Fed’s Manufacturing Index came in with a minus 10.6 versus a minus 7.0 expectation. Any negative number indicates a contraction in the manufacturing sector. That’s pretty much been the case for twenty months now.

Taiwan Semi Soars, Apple Takes Flight: A Lesson in Ignoring Hype

Remember, oh, I don’t know, a couple of weeks ago, when some unknown analyst at some long-forgotten Wall Street firm predicted the end of Western Civilization because he made a phone call to a Verizon store in Shanghai and some minimum wage clerk, in between bites of his Big Mac said the new iPhone just wasn’t selling? Do you remember that?

Me neither.

Yesterday, we got some, ya know, actual financial results and Apple gapped up at the open, rallied all day, closed very near its high, and was up over three percent for the session.

Taiwan Semiconductor, which makes all the CPUs used in the iPhone, handily beat Wall Street expectations for sales and profits and raised guidance for 2024. Its stock was up almost 10% on Thursday. Ten percent.

This is a stark lesson on why we should never, ever listen to these so-called experts. Genuine experts are running multi-billion dollar hedge funds, not punching a clock at some third-tier broker in a basement office in lower Manhattan.

We should never, ever listen to genuine experts either. Buy index funds, and hold for the long term. If you’re not going to do that, keep your own counsel.

Apple will be fine.