The Buzz on Business for July 10th, 2024

If, in six months' time, the Dow Jones Industrial Average which is presently attempting to retake the 40,000 level, if in six months’ time it is instead above fifty thousand, we will look back and note that it was yesterday, Wednesday, July 10^th, that marked the beginning of the next leg up of this remarkable rally.

We hasten to add that this is not a prediction. We don’t do predictions on the Buzz on Business. Indeed, we never tire of ridiculing those who do. But we have been saying, perhaps whining is the better word, over the course of the last month or so that the market appeared, at least to us, to be consolidating. It was acting strange but wasn’t falling. We stated that if and when a breakout came, it would likely be to the upside.

Yesterday won’t go down in history as the most dramatic of breakouts and, of course, it could have been a fake out break out and markets could very well retreat from here. That would not surprise us in the least.

But it had all the hallmarks. The major indexes moved together and substantially. While we would have liked to have seen it higher, volume was good and good enough. And advancing stocks beat decliners by almost three to one. And, of course, the S&P 500 and the NASDAQ Composite closed at new, all-time highs.

It was a good day to be an investor, not so much for what it was but for what it might mean for the future.

Stock Market Report

The major indexes were all up and up sharply on Wednesday, something we have not seen in a while.

• The Dow Jones Industrial were up a stout 1.10%, over 429 points and they closed at 39,721. Can 40,000 be far behind.
• The S&P 500 was up a bit over one percent. It rallied fifty-seven points and closed at 5,634, a new all-time high.
• The NASDAQ Composite had a good day. It gained 218 points, nearly 1.20% and closed at 18,647, another new all-time high.
• The small caps joined in the rally. The Russell 2000 was up twenty-two points, that’s 1.10% and it starts the day today at 2,052.

Bond Market Report

Interest rates fell pretty much across the board on Wednesday.

• The rate on the 2-year treasury was off just one basis point and it closed at 4.622%.
• The 20-year was likewise down a tick and now stands at 4.584%

Oil, Gold, and Bitcoin

• After three straight down days oil managed a gain on Wednesday. It was up $0.69, and a barrel now changes hands at $82.10.
• Gold was up $8.00, and a troy ounce will now set you back $2,378.40.
• And Bitcoin was off $485.17 and at 4:00 PM ET stood at $57,437.88

Soft Landing? CPI Data on Tap

We’d have liked to have had a pithy story to report on what was the proximate cause for yesterday’s breakout. We couldn’t find one. Federal Reserve Board Chairman Jerome Powell testified before Congress again yesterday but said nothing that would pass as news. When asked directly by one of the amateur economists in the House of Representatives if rates would be cut at the Fed’s policy meeting at the end of this month, Powell responded with, “I’m not prepared to say that at present.”

Still, it looks as if Powell has achieved an economic soft landing. Rates have been higher for longer and yet the labor market, while softening over the last six months, remains robust.

The bugaboo remains inflation.

Speaking of which, we get the rollout of the Consumer Price Index complex this morning. The consensus estimate for the month-over-month increase in consumer prices is 0.20%. That’s above the Fed’s target but not by much and would very much be in line with the results we’ve seen recently.

It’s Thursday so we also get Initial and Continuing Jobless Claims. Expectations are for a slight decrease from last week’s slightly higher levels.

If that’s not enough, today marks the beginning of second quarter earnings season.

Everyone here at the Ministry of Truth will be huddled around the telescreens all day and will be parsing the reports and crunching the numbers well into the night.

So, all you have to do is keep it right here on the Buzz.