The Buzz on Business for June 14th 2024

On May 17^th, about a month ago, we all celebrated the fact that the Dow Jones Industrial Average closed above 40,000, for the first time. Just two days earlier, on the 15^th, both the S&P 500 and the Nasdaq Composite had closed at new all-time highs.

In the eighteen trading days since, the S&P has closed at a new all-time seven times, the NASDAQ nine. Both closed at new all-time highs yesterday. Not so much the Dow which has cratered. It’s been down eleven of those eighteen days and not only hasn’t made any new highs, has lost over 3.0% of its value during that time.

All of this has come while average daily volume has fallen to very low levels and declining stocks have led advancing stocks most days, even on days where the indexes have seen gains.

So, what’s going on? We’re not sure. We can say that we’d be more worried if it was the Dow, making new highs while the broader indexes corrected. The Dow is only thirty stocks and an argument can be made—we’ve made it—that it is not representative of stocks generally.

We can say, with some confidence, that a broad market is a healthy market. Divergences, like the Dow from the S&P and NASDAQ and stocks from volume and breadth always get resolved and often not without some drama.

We’ll keep an eye on this and will report on it from time to time on this podcast.

Stock Market Report

New all-time highs—AGAIN—for the S&P 500 and NASDAQ Composite but once again the Dow did not join the party, volume was pathetic—the lowest we’ve seen in over a month and one of the lowest levels all year—and declining stocks crushed advancers.

• The Dow Jones Industrials attempted to rally into the close but finished with losses. It was down sixty-five points, that’s two-tenths of one percent and they closed at 38,647.
• The S&P 500 was up a bit over two-tenths. It gained thirteen points and closed at 5,434, a new all-time high.
• Likewise, the NASDAQ Composite. It was up three-tenths, that’s fifty-nine points on the NASDAQ, and it closed at 17,668, a new, all-time high.
• The small caps had a tougher go of things. The Russell 2000 was off eighteen points, or nine-tenths of a percent and it starts the day today at 2,039.

Bond Market Report

Bonds continued to rally as rates fell through some support on Thursday.

• The yield on the 2-year treasury fell five basis points and closed at 4.703%
• The 20-year was off six ticks and it closed at 4.502%

Oil, Gold, and Bitcoin

• Oil was off $0.36, and a barrel now changes hands at $77.88.
• Gold was down $18.70, and a troy ounce will now set you back $2,319.00 even,
• And Bitcoin also posted losses on the session. At 4:00 PM ET it stood at $66,604.57, down $993.50.

Good News on Inflation, Labor Market Dissapoints

We were a bit surprised that markets didn’t post strength across the board today because the economic numbers, while mixed, dramatically made the case for rate cuts and for a healthy economy more generally.

The labor market has been very tight since we exited the pandemic and has shown some softening in recent months, although nothing that would set off alarm bells. And that was the case yesterday. Initial and Continuing Jobless Claims both missed their marks and came in at the highest levels in almost a year. It’s never good news when unemployment claims are up but this feels like, to us, as more of a reversion to the mean, than a sign of economic weakness, especially in light of last week’s stout jobs report.

But the big news was the Producer Price Index report.

Core MoM PPI was expected to come in at 0.30%. It came in at 0.0% Whoa!

The MoM PPI which includes the more volatile food and energy costs actually fell. Expectations were for a 0.10% increase. Minus 0.20% was the print.

One data point does not a trend make but a trend does indeed begin with a single point. Regardless, this is very good news. Let’s hope it continues.

A couple of reports are due out today. Nothing that’s likely to move the markets.

We’ve a field trip to the Prole’s Quarters for everyone here at the Ministry of Truth so they’ll be ready to go, bright and early Monday morning to bring all the business, financial, economic and stock market news to you, here on the Buzz.