The Buzz on Business for May 30th 2024

Many times, on this podcast, we’ve spoken about divergences and how they often signal to the careful observer that change is in the air.

Often, we take note of a divergence between price and volume. When the market is up but volume is down it is a sign of a lack of conviction. The same can be said when the market is up but declining stocks exceed advancers on the day.

Yesterday, we took note of the fact that on Tuesday, the NASDAQ saw gains while the rest of the broad market, including the Dow Jones Industrials had losses on the day.

On the 20^th of this month, just ten days ago, or so, all three of the major indexes closed at new, all-time highs. Since then, the S&P has hovered very close to that level, while the NASDAQ actually hit another all-time high. Basically, the S&P and NASDAQ have been flat to slightly higher in the last week.

The Dow, on the other hand, is off sharply. It’s been down five out of the last seven days and has lost close to four percent during that time. We hasten to add that it’s not the 4% that bothers us but the divergence.

Divergences usually resolve themselves, sometimes over time, sometimes all at once.

How will this one resolve? Today’s inflation report, due out at 8:30 am ET this morning, might hold the answer.

Stock Market Report

Stocks were broadly lower on Wednesday on rising volume as declining stocks swamped advancers by over five to one. All of it on the eve of today’s Personal Consumption Expenditures Index.

• The Dow Jones Industrial Average was off 411 points. That's almost 1.1% and it closed at 38,442.
• The S&P 500 was off 0.75%. That's 39 points on the S&P, and it starts the day today at 5,267.
• Once again, on the strength of the chips, the NASDAQ Composite had a slightly better go of things. It was still off six-tenths of 1%. That's 99 points, and it closed at 16,921.
• Not so much the small caps. The Russell 2000 was off 1.5%, that's 31 points. And finished the day at 2,036.

Bond Market Report

Bonds were mixed but rates were mostly higher.

• The yield on the 2-year treasury was up two basis points and closed at 4.975%.
• The 20-year was up seven ticks and now yields 4.821%.

Oil, Gold, and Bitcoin

• After appearing, to us, to have broken out to the upside on Tuesday, oil fell back into the trading range it's been in for most of the last month. It was off $1.22, and a barrel now changes hands at $79.00 even.
• Likewise, gold gave up most of Tuesday's gains. It was down $22.70, and a troy ounce will now set you back $2,336.20.
• And finally, Bitcoin was down again. It closed at $67,192.19 off $1,196.50.

Big Economic News Day on Tap

A news drought that seems, to us, to have gone on for weeks ends at 8:30 am ET this morning as a whole bunch of potentially market moving reports are set to be released.

• Initial and Continuing Claims for Unemployment and,
• Pending Home Sales for April are due out.
• Perhaps more interesting is the Gross Domestic Product for the first quarter will be released.
• But all eyes are focused on the first quarter, Core PCE numbers. Expectations are that the Fed’s favorite inflation gauge will state that prices grew at a 3.7% annual rate in the first quarter.
• The rest of the PCE complex rolls out tomorrow but if this number comes in higher or lower than expected markets will probably react. It might be an interesting day on Wall Street today.

Whatever happens we will report on all of it for you, tomorrow, here on the Buzz.