The Buzz on Business for July 19th, 2024

Perhaps we should, on this podcast, stick to reporting the numbers and stop contemplating the deep meaning of divergences because yesterday, the major indexes drew out the same patterns and spoke with one voice.

And it wasn’t pretty!

All the indexes sustained substantial losses on good volume on Thursday. A further rotation out of the Magnificent Seven you ask? NVIDIA was up by three percent.

Stock Market Report

Nothing but red numbers all up and down. Stocks actually opened higher, and we thought, well, ya know, maybe. But they soon turned tail, sold off hard and closed at or near the lows of the day.

• The Dow Jones Industrials gave back another 533 points, that’s 1.30% and they closed at 40,664.
• The S&P 500 was off eight-tenths of a percent and they closed at 5,545, down forty-four points.
• The NASDAQ Composite closed at 17,871, off 126 points, or seven-tenths of one percent.
• And the Russell 2000, which has outperformed in recent weeks, got crushed. It was down forty-one points, that’s 1.90%, and it starts the day at 2,198.

Bond Market Report

Rates were up, bonds were down, pretty much across the board yesterday.

• The yield on the 2-year treasury was down three basis points and it closed at 4.467%
• The 20-year settled at 4.520%, off four ticks on the day.

Oil, Gold, and Bitcoin

• Oil gave back all of Wednesday’s gains. It was off $2.05 and closed at $80.80.
• Gold was down $16.10, and a troy ounce will now set you back $2,445.60.
• And Bitcoin followed the trend downward. It was off $1,071.60 and at 4:00 PM ET stood at $63,536.17

A Wall of Worry

It is said, accurately in our view, that stocks rise on a wall of worry. And, for most of the first four months of this year, we had spiking inflation combined with a slowing economy to worry about. Stocks, led by the Artificial Intelligence revolution, went on a historic rally. Since November 1^st of last year, the S&P 500 is up over 30%. And pretty much straight up. A magnificent performance.

The economy continues to moderate. Initial and continuing jobless claims came in above expectations yesterday, (although the Philly Fed Manufacturing Index boomed—be still out heart.) And while we are not out of the woods yet, inflation is clearly in retreat.

And corporate earnings have been excellent. Only one red number on the Giant Quote Machine and Netflix had a great quarter and guided higher.

Plus, it seems clear that interest rates are headed down and soon.

And make no mistake, The Dow, S&P and NASDAQ are all near record highs, but we are less convinced that they mean it. And that has us scratching our heads, just a bit. And maybe more than a bit worried.