The Buzz on Business for April 23rd, 2024

When stocks make a dramatic move, one way or the other, our reflexive, initial reaction is one of skepticism. Perhaps this is just part of our nature, but we look for confirmation before coming to any conclusions.

First, volume. Did volume, the total number of shares traded that day, expand or contract? An increase in volume equates with conviction. A rally or a selloff on light volume is a rally or selloff primed for a reversal.

We next look at the Advance/Decline Ratio. The ADR gives us some insight into the breadth of the market’s movement. If breadth was narrow and if many or most stocks did not participate, we are inclined to doubt if the market will follow through on subsequent days.

Finally, we look at where the market closed. Market makers typically square their books at the end of each day. If they’ve been selling to eager traders and investors bidding stocks up, squaring the books might mean buying into the close. Conversely, if traders and investors have been selling, market makers have been buying from them all day long, and they might then be selling at the close. When this happens, markets close at or near their extremes for the day.

Reversals into the close are, therefore, another indicator of a lack of conviction.

Stock Market Report

Stocks opened higher and rallied throughout the day but, in the last ninety minutes, gave up thirty S&P points, almost half their gains, as volume fell from Friday’s level.

• The Dow Jones Industrial Average closed at 38,240. That’s a gain of seven-tenths of 1%, or 254 points.
• The S&P 500 was up 43 points. That’s nine-tenths of 1% and closed back above 5,000 at 5,011.
• The NASDAQ Composite was up 1.1%, 169 points, and it closed at 15,451.
• The small caps were up 1%. That’s 20 points on the Russell 2000. It closed at 1,967.

Bond Market Report

• Once again, the 2-year treasury flirted with the 5% level before once again falling back. It was down one basis point on the session and closed at 4.976%.
• The 20-year did finish flat. It closed at 4.843%.

Oil, Gold, and Bitcoin

• Speaking of finishing flat, oil was up a minuscule $0.01 and closed at $82.08 a barrel.
• Gold has us wondering again. It was down $59.20 and closed at $2343.30 a troy ounce.
• Bitcoin had a decent day. It was up $2190.20, and at 4:00 PM Eastern Time stood at $66,621.36.

We’d like to take a moment out of this podcast to wish our oldest child a happy birthday. One of the best and happiest people I’ve ever had the pleasure to meet. His only fault, so far as we can tell, is that he is a Yankee fan but that failing is really our failing. It’s on us.

You know you’re old when your kids are old. Happy 43rd birthday, Billy. I love you.

Earnings Out, Economic Data Due Out

Nine public companies that passed through the filters and made their way onto the Giant Quote Machine reported earnings during the day on Monday. Seven of those exceeded Wall Street’s expectations for earnings per share, although there were a few more red numbers on the revenue side of the ledger.

Today is the busiest day of earnings season so far; a bunch of companies are expected to announce sometime today. We will report on all of it to you tomorrow.

Yesterday, on this podcast, we mistakenly claimed that some interesting economic reports were due yesterday. We were wrong. Those reports are coming out today.

Our error resulted from our having 175,252 tabs open in our browser as we wrote Monday’s episode. The responsible fact-checkers are, as we speak, at the Ministry of Love for some much-needed re-education.

Today, we get building permits, new home sales, and the S&P US Manufacturing Purchasing Managers Index and again, we’ll have all of it for you tomorrow here on the Buzz.