Buzz on Business for Thursday, December 21^st, 2023.

Can markets move down as well as up?

Stock Market Report

Apparently, they can, and in dramatic fashion. As the clock struck noon, Eastern Time, on Wednesday, the Dow was up over one hundred and ten points, and we thought the winning streak was surely going to extend to ten days.

We were wrong!

• The Dow Jones Industrials sold off hard throughout the afternoon and closed on its low of the session at 37,082, which is off 476 points or 1.27%
• The S+P 500 was down 70 points, or 1.47% and closed at 4,698.
• The Nasdaq Composite was off 1.50% and closed 14,778, down 225 points.
• The XRT Retailers actually held up better than I would have expected. They’re usually more volatile to both the up and downside. On Wednesday, they were down 1.9% and closed at $70.84, off $1.36.

Bond Markets

My first thought, as I watched this sell-off in real time, was that something must be going on in the bond market. I was wrong! Bonds were up on the day and at all points along the yield curve.

• The yield on the two-year Treasury was off nine basis points and closed at 4.34%
• The twenty-year closed at 4.16%. That’s off five ticks.

Oil and Gold

So maybe it was Gold? Oil? Nope!

• Oil was down a minuscule thirty-nine cents and closed at $73.74.
• Gold traded in a tight range before finishing down $4.40 and a troy ounce will set you back $2,047.70.

My twenty-third thought was that maybe I missed an economic report or a bad earnings miss, even though earnings come out after the close. No explanation there either. The economic news was pretty good.

• The average rate on a thirty-year mortgage fell back below 7% for the first time since August.
• The Conference Board’s Consumer Confidence Index came in way above expectations.
• Existing Home Sales blew out its number.
• We also got some numbers from the energy sector. They were mixed. Nothing too bad.

Was the Market Just Overbought?

We combed through the news after the closing bell, looking for an explanation for such a dramatic selloff, and none was to be found. I think that the market just got ahead of itself over the last couple of weeks and months, and when a little selling started, no buyers were waiting in the wings. We will check all the commentary as the morning wears on, and we will let our readers know in tomorrow's Buzz on Business.

A Bearish Signal—More Data Due Out

The action in stocks constituted a bearish reversal, a higher high and a lower close is often a signal of more selling to come.

Later this morning, we get jobless claims, the Philly Fed Manufacturing Index, and the first piece of the PCE data. That’s the Fed’s preferred measure of inflation.

We will do what we do if you will do what you do and keep it right here on the Buzz!