Daily Market Report September 10th, 2024
After last week’s disastrous start to the sometimes tricky month of September, which was historical in some sense as mentioned in yesterday’s Notes, the market tried to redeem itself on Monday to claw back some of the losses from their worst week in nearly a year and a half.
The Dow rallied by 484 to 40,829 led by gains in the financial components while the S&P took an upside moonshot of 62 to 5471 with strength in the beaten-down former financial leaders plus nice gains in the financials.
The Nasdaq was the real hero as it skyrocketed up by 193 to 16,884 as NVDA and AVGO did better after their downside shellacking from last week and AAPL, which was lower for most of the day on the traditional weaker trading upon the introduction of a new product, managed a late rally to end nominally higher.
The Russell 2000 Index followed along for the upside ride on stronger regional financials with a 6 point gain to 2096 and the VIX really took it on the downside chin after last week’s gains on weaker stocks to end at 19.45.
BA, of all things, rose after reaching a tentative deal with its largest union on a new contract that, if ratified, will avoid a strike that threatened to shut down aircraft production by the end of the week. It said that 33,000 workers represented by the International Association of Machinists and Aerospace Workers would get pay raises of 25% over the four-year contract.
After likewise climbing a bit in the morning, Treasury yields later pared their gains. That followed sharp swings in the bond market last week, when the August jobs report came in weak enough to worsen worries about the slowing U.S. economy.
The Federal Reserve has been intentionally pressing the brakes on the economy through high interest rates in order to deal with high inflation and is about to start lowering rates on September 18th, which would ease the pressure on the economy, as it turns its focus toward protecting the job market and avoiding a recession.
Today, the absence of glaring household or corporate balance sheet vulnerabilities means Fed easing should be enough to prevent recession, and should provide investors some optimism for the future of the market, was one outside observation.
Two companies did well on their addition to the S&P, as PLTR jumped by 14% in its first trading and DELL also gained.
Trading in BIG was halted after the discount retailer filed for Chapter 11 bankruptcy protection and said it plans to sell its assets and ongoing business operations to private equity firm Nexus Capital Management.
In the bond market, the 10-year Treasury yield edged down to 3.71% from 3.72% late Friday.
In stock markets abroad, indexes rose in much of Europe after falling in Asia. Japan’s Nikkei 225 slipped 0.5% after the country’s economic growth for the second quarter was revised below expectations.
Chinese stocks racked up losses after worse-than-expected inflation data disappointed investors. Indexes fell 1.4% in Hong Kong and 1.1% in Shanghai.
Earnings this week include: today – ORCL and PLAY; tonight – GME; Wednesday – VRB; Thursday – ADBE, KR.
Economic reports will have: Wednesday - the important August C.P.I.; Thursday – August P.P.I., weekly jobless claims; Friday – initial September U. of Michigan Consumer Sentiment Survey.
By Don Selkin