The Buzz on Business for April 15th, 2024

Given the results of Friday’s trading, which we’ll get to in just a minute, Wall Street seems to finally be coming to grips with the now undeniable fact that whatever Federal Reserve Board members happen to say in speeches or whatever politicians happen to threaten in Congressional hearings, interest rates are not going down this year and may indeed be going up before they go down.

Of course, we’ve been saying this for months, and we suspect we are not alone in that sentiment. While falling or lower rates would be good for stocks, resurgent inflation would be far worse.

But, just as important as rates is the state of the economy, which, while not going gangbusters, is relatively strong. Unemployment is low, and at a tick or two below 5%, interest rates really aren’t all that high.

If we were a gambler, and we’re not. If we’ve made predictions, and we don’t. We’d lay odds that any market correction that develops over the next couple of months will be shallow, brief, and “V” shaped.

Assuming the Fed does its job, and the jury is always out on that question and defeats the inflation beast, stocks and bonds could be primed and ready to go when the Fed is finally ready to cut rates, perhaps sometime next year.

But even as we say this, we can think of a thousand and one ways it could all go wrong.

Stock Market Report

Nary a green number to be seen anywhere on the Giant Quote Machine at the closing bell on Friday. Stocks were down sharply; declining stocks outpaced advancers by nearly five to one, and all of it came on good volume, but interest rates were also down, not what you’d expect in a world-comes-to-an-end scenario.

• The Dow Jones Industrials were down 476 points, that’s 1.25%, and they start the week at 37,983.
• The S&P 500 was down 1.50%, that’s 76 points on the S&P, and it closed at 5,123.
• The NASDAQ Composite fell 276 points, over 1.60%, and closed at 16,175.
• The Russell 2000 was off 1.9%, 39 points, and finished the day and week at 2,003.

Bond Market Report

Rates were down across the board on Friday. That surprised us a bit and is, perhaps, a sign of some strength amid much weakness.

• The yield on the 2-year treasury fell to 4.901%, that’s off six basis points.
• The 20-year was off five ticks and now yields 4.753%.

Oil, Gold, and Bitcoin

• Oil was off a minuscule $0.07 and starts the week at $85.40 a barrel.
• Gold bucked the trend. It was up a minuscule $1.40, and a troy ounce now changes hands at $2,374.10.
• Bitcoin sure didn’t! It was off $3,427.41, and at 4:00 PM ET Friday stood at $67,039.47.

Earnings Take Center Stage

Blow out earnings from JP Morgan, Wells Fargo, Citigroup, Black Rock, and State Street on Friday. A sea of green numbers with both the top and bottom lines exceeding expectations.

Could this opening gambit point to higher than expected numbers throughout first-quarter earnings season?

This week could hold the answer as earnings season starts to heat up. Big banks and financial companies dominate the reports this week. We also get Netflix, which always seems to move the markets one way or the other.

Busy Economic Week on Tap

We’re also looking at a busy economic calendar. Today, the retail sales complex rolls out. Expectations are that retail sales increased in March by 0.5%. Last month, they were up 0.3%.

As happens every Thursday, initial and continuing jobless claims are announced. Existing home sales are due out. Given the persistent higher interest rates, the average rate for a 30-year mortgage spiked back up above 7% last week, and the housing market bears watching.

And we will be watching all of it very carefully so we can report all of it to you every morning here on The Buzz.