Another Tech Wreck

Daily Market Comment

July 19, 2024

Stocks were on their back foot from the opening bell today after a technical glitch from cyber security firm CrowdStrike (CRWD) brought down some global banks, transportation systems and cloud software companies. CrowdStrike dropped almost -20% at the bell weighing on the technology sector and NASDAQ before closing down -11.10%. Q2 earnings didn't help as American Express (AXP), Travelers Companies (TRV) and Halliburton (HAL) traded lower on mixed results and guidance. Weakness was almost across the board with only the Healthcare (XLV) and Utilities (XLU) sectors positive. Technology (XLK), Energy (XLE), Financial (XLF), Materials (XLB) and Consumer Discretionary (XLY) were the worst performing market groups. The different indexes bottomed midday and moved sideways in choppy trading closing not far off the lows of the day in a week that saw the major averages finished mixed. The DJIA was down for a second straight session as it dropped 377.49 points (-0.93%) and settled at 40287.53. The S&P 500 lost 39.59 points (-0.71%) closing at 5505.00, while the NASDAQ tumbled 144.28 points (-0.81%) finishing at 17726.94.

Breadth was negative with declining issues beating advancing issues 1.7:1 on the NYSE and 1.9:1 on the NASDAQ. Declining volume was 59% on the NYSE and 60% of the NASDAQ. The VIX jumped 0.59 (+3.70%) and closed at 16.52. Crude oil prices fell 2.55 (-3.08%) and the August contract closed at $80.27 a barrel. Gold prices dropped 55.10 (-2.24%) and finished at $2401.300 an ounce. Bitcoin (BTC) closed the session at $67,000.

Investors were hesitant to buy the dip today, waiting to see what the fallout of CrowdStrike's outage is. That didn't help the tech sector which was already suffering from selling in semiconductors and AI related stocks. The Philadelphia Semiconductor Index dropped -3.11% today and was down -8.8% on the week, dipping below support at its 50-day MA. While the major averages finished the period mixed, the NASDAQ turned in its worst weekly performance since April. Look for a choppy and volatile week coming up with a heavy slate of earnings, including some of the mega cap winners, with eyes on whether Biden will remain the Democrats nominee and who could be his replacement.

Earnings releases to watch for on Monday include: Cadence Design Systems (CDNS), Cleveland-Cliffs (CLF), Crown Holdings (CCK), Nucor (NUE) and NXP Semiconductors (NXPI).

Monday's Market Moving Economic Calendar: T-Bill Auctions.

By David L. Blake, CMT

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Market Recap - 07/19/2024

Index Close Day Change Day % Change YTD % Change
NASDAQ COMPOSITE 17726.94 -144.28 -0.81% 18.09%
DJ UTILITIES 950.85 -0.04 0% 7.85%
DJ TRANSPORT 15783.45 -3.77 -0.02% -0.73%
DJ INDUSTRIALS 40287.53 -377.49 -0.93% 6.89%
NYSE COMPOSITE 18406.05 -107.69 -0.58% 9.22%
S & P 100 INDEX 2661.46 -20.66 -0.77% 19.02%
RUSSELL 2000 2184.35 -13.94 -0.63% 7.76%
S&P 500 5505 -39.59 -0.71% 15.41%
CBOE MKT VOLATILITY 16.52 0.59 3.7% 32.69%
AMEX COMPOSITE 4984.99 -24.57 -0.49% 8.5%
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