The Buzz on Business for July 30th, 2024 

Microsoft and a host of other big technology companies sold off during the day on Tuesday, in anticipation of and worries about the company’s earnings report which was released after the closing bell. Well, talk about egg on your face. Microsoft handily beat estimates for both the top and bottom line.  

The company earned $2.95 per share, versus estimates of $2.94 on revenue of $64.7 billion. Estimates were $64.3 billion. 

So, the stock must have rebounded in the after-hours session, right? Wrong. After announcing sales and profits that exceeded Wall Street’s objectives, the stock got crushed. Down about one percent during  the day, it was off an additional 6% after the announcement. Apparently, the company’s Cloud Infrastructure business missed its targets. Yeah, but. 

We’ve long ago given up trying to connect the performance of a stock to its earnings reports, at least in the very short term. Just this week, McDonalds missed on both the bottom and top lines. Missed by a wide margin. And the stock rallied. It rallied again yesterday. It was up nearly 2%, on a down day. 

Sometimes, this stuff just doesn’t make much sense. Sometimes it makes no sense at all. And that’s why we love it! 

Stock Market Report 

Another one of those days where the economic news was good, the earnings news was good, advancing stocks exceeded decliners yet markets finished mixed mostly lower and on strong volume. 

• The Dow Jones Industrials were up one-half of one percent. That’s 203 points and they closed at 40,743. 

• The S&P 500 was down one-half of one percent. That’s twenty-seven S&P points and it closed at 5,436. 

• The techs had a tougher go of things. The NASDAQ Composite was down one and a quarter percent, 223 points and it closed at 17,147. 

• And the Russell 2000 was up, four-tenths of a percent. The small caps closed at 2,243 for an eight-point gain. 

Bond Market Report 

Interest rates continued their downward trajectory. 

• The yield on the 2-year treasury was off four basis points and closed at 4.361% 

• The 20-year was off three ticks and closed at 4.494%. 

Oil, Gold, and Bitcoin 

• What is going on with oil. It was off another $0.63 and had been off even more than that early in the session. A barrel now changes hands at $75.17. 

• And what is going on with Gold? It was up $72.10. That may be the biggest daily gain for gold ever. A troy ounce will now set you back $2,455.40 

• And Bitcoin was off $1,428.79 and at 4:00 PM ET stood at $65, 907.99. 

The Fed Looms Large: Preview of Today's Interest Rate Decision 

Forty companies reported earnings on Tuesday. All but eight met or exceeded expectations for earnings. Eleven missed their top line objective. 

The JOLTS job openings report came in above expectations. We read some grumbling about some of the deep tracks on that report but from our perspective, this is good news out of the labor market.  

Housing prices were up almost 7% over the last twelve months, according to the Case/Schiller Index which was released yesterday. They were up a full one percent in May. Expect the political class to start talking about plans to make it easier for people to buy a house, which, of course, would make things even worse. A better plan might be to help people build houses. The housing problem in the US is very much a supply problem. 

Today, all eyes are on the Fed, its statement and its decision on the Fed Funds Rate, both of which will be released at 2:00 PM ET this afternoon, followed at 2:30 by the Chairman’s press conference. 

Everyone here at the Ministry of Truth will be gathered around the telescreens and will be pawing through the tea leaves long into the night so that we can analyze and report all of it to you tomorrow, here on the Buzz.