The Buzz on Business for July 17th, 2024

The Chicago Mercantile Exchange is a great collection of financial market traders and contracts to be traded. If you want to speculate, or hedge your bets on the price of Soybeans, Crude Oil or Gold, the CME is where you will end up.

They also trade the Fed Funds Futures contract at the CME, and there you can take a position on the direction and timing of changes to Federal Reserve Board policy. Market participants use the contract to wager on the direction of the Fed Funds rate, providing insights into future rate expectations. By analyzing the contract, observers can determine the implied probabilities of the Fed Funds rate at future FOMC meetings.

The trading in this contract on Tuesday places the odds of a rate cut by the Fed’s September meeting of the at 100%. Things obviously change, day by day and even hour by hour but this is the first time this cycle that traders have placed the odds for a rate cut at 100%.

Markets reacted as you might expect. Interest rates fell and stocks, well stocks, went to the moon.

Stock Market Report

Stocks opened higher and except for the NASDAQ closed at or near their highs for the day as advancing stocks exceeded decliners by almost four to one and all of it on strong, strong volume.

• The Dow Jones Industrials were up and astounding 743 points, almost 1.9%, and not content with topping 40,000 takes aim at 41,000 two days later. The Dow closed at 40,954, a new all-time high.
• The S&P 500 was up a respectable six-tenths of a percent, that’s thirty-six points on the S&P and it closed at 5,667, a new all-time closing high.
• Not so much the tech-heavy NASDAQ Composite. It was up but just two-tenths, as the rotation out of the Magnificent Seven continues. It closed at 18,509, for a gain of thirty-seven points.
• The chart of the small-cap Russell 2000 is just stupid. It was up another 3.50%. That’s seventy-seven points and it starts the day today at 2,264.

Bond Market Report

Rates continued to fall on Tuesday.

• The yield on the 2-year treasury was off four basis points and it closed at 4.419%.
• The 20-year was off eight ticks, and it now yields 4.477%.

Oil, Gold, and Bitcoin

• Oil was down for the third day in a row. It was off $1.15, and a barrel now changes hands at $80.76.
• Rates were down so gold must be up and it was $47.50, and a troy ounce will now set you back $2,473.50.
• And Bitcoin had another good day and got back above $65,000 for the first time in about a month. It was up $1,788.96 and at 4:00 PM ET stood at $65, 226.47.

Earnings, Economic Data: All Above Expectations

Nine companies reported second quarter results during the day on Tuesday. Eight met or exceeded expectations and only one of those missed its top line objective.

Retail sales came in gangbusters. Expectations for month-over-month Core Retail Sales were for an increase of 0.10%. The print tripled that number with a 0.30% increase.

The Atlanta Fed’s GDP Now report, which seems to be rather more volatile than helpful, did come in at an annualized 2.50% in the second quarter, well above expectations.

Today, we get Building Permits and Housing Starts, as well as the Industrial Production figures.

While manufacturing is always breaking our hearts, here at the Ministry of Truth, we will press on, and read, watch, listen, analyze and report all of it so all you have to do is keep it right here on the Buzz.