The Buzz on Business for Monday, January 29^th, 2024

We’ve spent over forty years in the world of personal finance and investing. We’ve worked hard to be someone who, in an industry filled with pretenders, at least tried to know what he was talking about. And we’d thought maybe, just maybe, we’d succeeded. At that.

We were wrong.

So far this earnings season, everything we’d believed to be true—knew to be true—has turned on us. Has laughed in our face!

Should we quit? Forget about this financial writing and podcasting thing? Get a job doing something even we can’t screw up? In a McDonalds? Mow lawns for a living? You want fries with that?

Nah! We’re having too much fun!

Stock Market Report

Stocks finished mixed on Friday—to end a day and week that just made no sense to us.

• The Dow Jones Industrials opened higher, sold off mid-day but held on for a small gain. It closed at $38,109, up sixty points or two-tenths of a percent.
• The S&P 500 tried but did not hold on! It closed with a small loss at 4,891, down a minuscule three points.
• The Nasdaq peaked its head into positive territory in the late morning but never really had its heart in it. It closed off fifty-five points, that's four-tenths of a percent, and it starts the week at 15,455.
• Today, we begin covering the small-cap Russell 2000 Index on the Buzz on Business. It closed at 1,978, down three points or two-tenths of a percent.
• The RSP managed a gain of just one one hundredth of a percent. But hey! A win is a win!
• The SOXL had a very bad day. It lost 8.38%.

Bond Market Report

Rates were up across the board, but not by much. Bonds apparently couldn’t figure out what stocks were doing either, I guess.

• The 2-year treasury closed at 4.355%, up six basis points.
• The yield on the 20-year was up less than a tick, basically flat, and closed the week at 4.486%

Oil, Gold, and Bitcoin

• Oil is in full rally mode now. It was up $1.07 and closed at $78.12. That’s its highest close since mid-November.
• Gold was up $0.70 and closed at 2,018.5
• Bitcoin appears to have shaken off the funk it has been in lately. It was up a stout $2,480.71.

PCE Numbers "Meh," Pending Homes Explode: Why We're Not Celebrating (Yet)

So, we must explain why this market has got us so confounded and confused.

But first, let’s talk inflation. The PCE numbers were released on Friday and basically came in as expected. We follow the Month-over-month numbers a bit more closely, and both the full and core indexes came in at 0.2% in December. We saw some celebrating in both the financial and political press. We don’t think so. Inflation at a 2.4% annual rate is still too high. It is still above the Fed’s targets, and it is still too soon to cut rates, with the economy as strong as it appears to be.

But that may be just us! Probably is.

We follow the housing market closely on this podcast, and Pending Home Sales, which was also released on Friday, crushed expectations. I’m CERTAIN every housing-related stock will sell off as a result!

Netflix & Chill, Grab Your AmEx, We're Heading to the Liquor Store: Embrace the Market Madness

And that brings us to this crazy market.

So far, we’ve seen headline earnings from 3M, Netflix, and Tesla, and on Friday, we got American Express and Intel.

On Wednesday, after the close, Tesla missed, badly on sales and profits and got crushed on Thursday. It had a small gain on Friday, but it's bad. As it should be. High fliers, priced for perfection, better be perfect. If not, you and your shareholders are gonna suffer.

While I don’t wish Tesla any ill will, this is fine. All is right with the world and at the Ministry of Truth.

But 3M actually exceeded expectations last week. As did Intel after the bell on Thursday. Indeed, Intel beat its number senseless. 3M was the worst-performing stock in the DJIA on Wednesday and Thursday; Intel was the worst on Friday. And they exceeded expectations.

Netflix missed on Tuesday. It went to the moon on Wednesday. And Thursday. And Friday.

And then there is American Express. Friday, before the opening bell, the company reported sales and profits below expectations. Not by much, but a miss is a miss, am I right? And it’s a bank! A boring bank that’s been around for a hundred years. The stock rocketed to a new, all-time closing high. If you saw the chart, you’d swear it was some tiny Artificial Intelligence startup trading on the Edmonton Exchange.

Don’t leave home without it.

We don’t understand. We thought we did. But we don’t!

We think we’re gonna grab our American Express card, make a quick trip to the liquor store, sit on the sofa and Netflix, and chill.

Until tomorrow, that is, when we’ll get all riled up once again. Here, on the Buzz!