S&P 500 Notches New All-Time High | Beyond the Bell

Summary

The transcript discusses the closing of a record-setting day for the S&P 500, with a focus on the performance of big cap stocks like Microsoft, Google, and Amazon, which are expected to invest heavily in CapEx. Small caps and Bitcoin are not participating in the stock market's rally. Tech and consumer discretionary sectors lead gains, while Oracle hits a record close. Declines are noted for Boeing and Southwest shares, affected by manufacturing issues and delivery challenges. The conversation also touches on the impact of rising prices on music festivals and the potential for a central bank cutting cycle hinted by ECB.

Takeaways

• 📈 The S&P 500 is on track for another record-setting day, with a 1.1% gain and 57 points higher at 5001.75.
• 📊 Small caps are not participating in the stock market rally, unlike the large caps which are seeing significant gains.
• 💰 Bitcoin continues to hit new records, trading above $71,000 and up 70% so far this year.
• 💼 Corporate bond issuance remains steady despite a slightly higher than expected inflation report for February.
• 🚀 Big tech companies like Microsoft, Google, and Amazon are expected to spend heavily on CapEx, potentially driving their stock prices higher.
• 📊 The Russell 2000 index is relatively unchanged, sitting out the rally, while Chinese stocks traded in the US and Nasdaq have rallied about 20% from their lows.
• 🏦 Oracle is the top gainer in the S&P 500, closing at a record high after beating earnings expectations and announcing joint ventures.
• 📈 In the S&P 500 sectors, infotech, communication services, and consumer discretionary all saw gains of at least 1%, with tech as a group up by 2.5%.
• 📉 Boeing shares fell over 4%, trading at October lows, affected by manufacturing issues and delivery challenges with the 737 Max.
• 📉 Southwest Airlines shares dropped close to 15%, the most since March 2020, due to capacity reduction plans and reliance on Boeing's 737 Max aircraft.
• 🥿 Swiss shoe company Bally misses Q4 net sales estimates, but analysts see positive momentum despite the results.

Q & A

What is the current status of the trading day mentioned in the transcript?

The transcript mentions that the discussion is taking place just 2 minutes away from the end of the trading day.

Which index is reported to have a record-setting day?

The S&P 500 is reported to have a record-setting day, with a 1.1% gain and 57 points higher at 5001.75.

How are small caps performing compared to large caps?

Small caps are not participating in the run up in stocks as much as large caps are, with the Russell 2000 remaining relatively unchanged.

What is notable about Bitcoin's value during the time of the transcript?

Bitcoin's value is noted to be above $71,000 per Bitcoin, with a 70% increase so far in the year mentioned in the transcript.

Which sectors within the S&P 500 saw the biggest gains?

The biggest gains were seen in the infotech, communication services, and consumer discretionary sectors, all up by at least 1%, with tech as a group up by two and a half percent.

Which company's shares are mentioned as being the biggest gainer in the S&P 500?

Oracle is mentioned as the biggest gainer in the S&P 500, closing at a record high.

What happened to Boeing's shares according to the transcript?

Boeing's shares finished the day down by more than 4%, trading at October lows, and are down almost 30% so far in the year mentioned.

What is the impact of the 737 Max crisis on Southwest Airlines?

Southwest Airlines' shares fell significantly due to the 737 Max crisis, with the company planning to reduce capacity by at least one percentage point and facing challenges due to Boeing's delivery schedule.

What is the notable performance of in-video in the transcript?

In-video experienced a climb back, with its shares up 7% at the close of trading after a two-day rout that wiped about $172 billion off the value of the world's most valuable chipmakers.

How did the market react to the inflation report mentioned in the transcript?

The market reacted to the inflation report by initially selling off, causing yields to move higher across the curve. However, there was also mention of the European Central Bank potentially cutting rates in the spring, which could influence market behavior.

What is the significance of the discussion about music festivals in the transcript?

The discussion about music festivals highlights the economic impact of the pandemic on the entertainment industry, with many festivals being canceled due to rising costs and artists demanding higher prices to compensate for lost income.

Outlines

00:00

📈 Market Wrap and Tech Performance

The paragraph discusses the closing of the trading day, highlighting a potential record close for the S&P 500. It emphasizes the disparity between large-cap stocks, which are performing well, and small-cap stocks, which are not participating in the market's uptrend. The conversation also touches on the steady corporate bond issuance despite a slightly higher-than-expected inflation report for February. The focus shifts to big tech companies like Microsoft, Google, and Amazon, which are expected to invest heavily in CapEx, driving their stock prices higher. The segment concludes with a discussion of individual stock performances, mentioning Oracle's record close and InVideo's gains, while noting Boeing's and Southwest's significant declines due to ongoing challenges with the 737 Max aircraft.

05:03

📉 Declining Giants and Economic Indicators

This paragraph delves into the challenges faced by Boeing and Southwest Airlines, with Boeing's shares trading at October lows due to manufacturing failures in the 737 Max production and Southwest's shares plummeting due to reduced capacity plans and reliance on Boeing's aircraft. The discussion then moves to the broader economy, with mentions of a New York Times report, the impact of the CPI report on yields, and the potential for a central bank cutting cycle. The segment also explores real economic indicators, such as the Hamptons real estate market and the cancellation of music festivals due to rising prices and artist demands, suggesting a shift in consumer preferences and economic trends.

10:06

🎶 Music Festivals and Aging Audiences

The final paragraph of the script shifts focus from financial markets to the state of music festivals. It discusses the cancellation of numerous festivals in the US due to increased costs and the pandemic's financial impact on artists. The conversation reflects on the personal experiences and preferences of the speakers, who express a waning interest in traditional music festivals due to comfort and convenience concerns, such as the need for seating and bathrooms. The speakers also touch on the consolidation of the festival scene and the preference for individual concerts featuring favorite artists, indicating a shift in the entertainment industry and the evolving tastes of aging audiences.

Keywords

💡Trading Day

A trading day refers to the period during which financial markets, such as stock exchanges, are open for the buying and selling of securities. In the context of the video, it signifies the time frame within which the events and discussions are taking place, specifically mentioning the last two minutes before the closing bell, which marks the end of the trading session for the day.

💡Closing Bell

The closing bell is a metaphorical term used to describe the final signal of the day's trading on stock exchanges. It symbolizes the end of the trading session. In the video, the hosts are counting down to the closing bell, which is a significant event as it marks the conclusion of the day's market activities and the finalization of stock prices.

💡S&P 500

The S&P 500, or Standard & Poor's 500, is a stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States. It is a widely followed index and is often used as a proxy for the overall performance of the U.S. stock market. In the video, the S&P 500 is mentioned as being on track for another record-setting day, indicating strong market performance.

💡Bitcoin

Bitcoin is a decentralized digital currency that operates without a central authority or government. It is a form of cryptocurrency and has gained significant attention due to its rapid price increases and the technology behind it, known as blockchain. In the video, Bitcoin's price is mentioned as being above $71,000, indicating its continued relevance and popularity in the financial world.

💡Corporate Bond Issuance

Corporate bond issuance refers to the process by which companies raise funds by selling bonds to investors. These bonds are debt securities that represent a loan from the investor to the company, with a promise to pay back the principal amount along with interest over a specified period. In the context of the video, the steady issuance of corporate bonds is mentioned, indicating a healthy credit market despite the slightly higher-than-expected inflation report.

💡CapEx

CapEx, or capital expenditure, refers to the spending by a company on assets that are expected to provide benefits over a long period, typically more than one accounting cycle. This includes investments in physical assets like property, industrial buildings, or equipment, as well as investments in technology and R&D. In the video, it is suggested that large tech companies like Microsoft and Google will be spending a lot on CapEx, which is tied to a reinvestment cycle and is seen as a fundamental reason for the upward movement of their stock prices.

💡Russell 2000

The Russell 2000 is a stock market index that represents the performance of the smallest 2000 stocks in the Russell 3000 Index, which is a broader index that includes the 3000 largest U.S. stocks. The Russell 2000 is often used to gauge the performance of small-cap companies and is considered a different segment of the market compared to large-cap indices like the S&P 500. In the video, the Russell 2000 is mentioned as not participating in the rally, indicating a divergence in market performance between small-cap and large-cap stocks.

💡Chinese Stocks

Chinese stocks refer to the shares of companies that are either based in China or have significant operations there and are traded on various stock exchanges, including those in the United States. These stocks can be influenced by economic, political, and regulatory developments in China. In the video, there is a mention of a rally in Chinese stocks trading in the U.S., indicating a positive performance trend for these companies.

💡Infotech

Infotech, short for information technology, refers to the sector of the economy that deals with the use of computers and software to manage information. It encompasses a wide range of industries, including software development, hardware manufacturing, and IT services. In the context of the video, infotech is one of the sectors within the S&P 500 that saw significant gains, indicating a strong performance by companies in the technology space.

💡Oracle

Oracle Corporation is an American multinational computer technology corporation that specializes in developing and marketing database software and technology, cloud-engineered systems, and enterprise software products. In the video, Oracle is mentioned as the number one gainer in the S&P 500, indicating that it had the highest increase in stock price among the companies listed in the index, which could be attributed to positive earnings reports and strong cloud revenue growth.

💡Boeing

Boeing is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles. In the video, Boeing shares are mentioned as finishing the day down by more than 4%, indicating a significant drop in the company's stock price. This decline is attributed to various issues affecting the company, including manufacturing failures in the production of the Boeing 737 Max and lagging deliveries compared to competitor Airbus.

Highlights

The trading day is ending with anticipation of another record-setting day for the S&P 500.

Small caps are not participating in the stock market run-up, while big caps are leading the trade.

Bitcoin continues to see record days, trading above $71,000 and up 70% so far this year.

Corporate bond issuance remains steady despite a slightly higher-than-expected inflation report for February.

Big tech companies like Microsoft, Google, and Amazon are expected to spend heavily on CapEx, potentially driving their stock prices higher.

The S&P 500 is shining with a 1.1% gain, setting a fresh record high.

Chinese stocks traded in the U.S. are rallying, with some up about 20% from the low.

Oracle is the biggest gainer in the S&P 500, closing at a record high after beating earnings expectations.

In-video, the climb is back with a 7% increase at the close, following a two-day rout.

Novo Nordisk's ADR is up 3%, with the Danish drugmaker's sales of obesity medicine soaring.

Boeing shares are down more than 4%, trading at October lows, affected by manufacturing process failures and slowed deliveries.

Southwest shares fell the most, down close to 15%, due to Boeing's challenges and fluid delivery schedules.

The market is conflicted over interest rates following the CPI report and potential central bank actions.

The Hamptons real estate market is seeing high-end properties with asking prices of $20 million or more.

At least ten music festivals in the U.S. have been canceled this year due to rising prices and pandemic-related financial pressures.

The discussion suggests a trend of consolidation in the music festival industry, with overlapping artists and audience preferences.

The conversation reflects on the appeal of music festivals, with comments on the experience and preference for individual concerts.

Transcripts

And right now we are 2 minutes away from the end of the trading day.

Romaine Bostick alongside Alix Steel, we're counting down to the closing bell.

Here to help take us beyond the bell. It's a global simulcast.

We're joined right now, as they are every day at this time of Scarlet Fu in

our television studio, Carol Massar and Tim Cinetic in our radio booth.

Welcome to our audiences across all of our Bloomberg platforms on what looks

like it's going to be another record setting day for the S&P 500.

All I really want to know is can I have a side of fries with the Nothing burger?

Oh, gosh, yes. Yes, maybe cheese fries.

Hey, listen, you know what? Yeah, we do have maybe a record close,

but small caps really not partaking in this run up in stocks.

It's definitely some of the bigger cap names that we are seeing in this trade

and also not seeing a record as we speak now on Bitcoin, although the fact of the

matter is it has been record day after day, still above $71,000 per Bitcoin,

up, of course, 70% so far this year. Scarlet.

Okay, so small caps not participating, big caps on participating.

But you do see the credit market not really missing a step because corporate

bond issuance is pretty rock steady today even after the inflation report

showed slightly hotter print than expected for the month of February.

But obviously, big tech outperforming and I love tying this into the Bank of

America. Note that we got earlier today about

earnings. Is it the big guys like a microsoft and

a Google and Amita and Amazon? They're going to be spending a lot of

money on CapEx as a reinvestment cycle. Now, that is a fundamental thesis to why

some of these names will be going higher.

The lot of beneficiaries of that kind of money remain.

Yeah, but the question, though, is how far how widespread is that going to be?

Right. I mean, that's been the story for a

while for those large cap names. And I guess that's great if we can

continue to sort of have the market being driven by those names.

But where's the broadening out in that that maybe there isn't?

Yeah, the small caps, I don't know. That would be interesting.

Let's walk you through the numbers here as we break down all the action here on

the day green across the screen, at least for the large caps on this Tuesday

afternoon, the Dow Jones Industrial Average up by about 200 points or 6/10

of a percent here on the day. The Nasdaq composite is going to finish

higher by roughly about one and a half percent.

But it's the S&P 500 that's really shining right now, a 1.1% gain on the

day, 57 points higher, 5001 75 and change.

And that is, yes, a fresh record high. And as Carol was just alluding to,

Smallcaps not really getting much love, at least for the day.

The Russell 2000, relatively unchanged here on the day sitting out the rally.

Yeah. And you know what we really saw rally is

those Chinese names that traded in the United States and Nasdaq gold and Dragon

almost blast from the past. I know.

But, you know, we've seen Chinese stocks up about 20% from the low.

So, you know, you do wonder, do we hit a market bottom here, at least on those

names? Scarlette.

Leave it to Carol to keep an eye on those names.

I'm looking at the different sectors within the S&P 500 and the biggest

groups saw the biggest gains. You have infotech, communication

services and consumer discretionary all up by at least 1% with tech as a group

up by two and a half percent. The smallest parts of the market

utilities, real estate, investment trusts and energy each losing ground.

That's why the pie is so green. All right, speaking of green, let's get

to some of the individual names. Oracle number one, gainer in the S&P

500, I believe, closing at a record. I have to double check that.

But it's up. That's a record sent here at the close.

Thanks Remain so hitting a record in the close here today.

Cloud revenue growth right we were breaking their earnings down after the

close yesterday. Company did report third quarter results

that beat expectations on key metrics. Said demand for the company's gen two

infrastructure substantially exceeding supply company also saying Oracle to

have exciting joint announcements with end video soon Mizuho raising its price

target to 160 from 140 and that stock closing at just below 130 a share.

All right, So speaking of in video, the climb is back.

It's up 7% here at the close, a gainer after a two day rout that wiped about

172 billion off the world's most valuable chip makers.

Market cap latest retreat had come after, we know, an unbelievable rally in

this name that propelled it into overbought territory.

It's up about 80% so far this year. Again, the number one gainer in the S&P

500 for the second year in a row early on here in 2024 by a mile and again and

among the top gainers in both the S&P and the NASDAQ 100.

And it was interesting to see all those other chip names rally today, you know,

like Supermicro and Soundhound and some of those names as well.

Again, right, Right. The momentum continuing again today in

the trade. He one more for you, Novo Nordisk, The

ADR is a trade here in the U.S., up 3% at the close of trading, pretty much

finishing at its best levels of the session.

Nova Holdings, the shareholder that controls Novo Nordisk.

So it's income in investment returns surged tenfold last year as the Danish

Drugmaker's sales of obesity medicine soared.

I mean, we know the story we've been talking about.

It was one of the big stories last year. It is again this year.

But again, Novo Nordisk, the ADR is up about 3% here, Tim.

All right. Let's get to some of the decliners on

this Tuesday afternoon. I do want to start with Boeing shares

finishing the day down by more than 4% now trading at October lows not seen

since October, I should say, down almost 30% so far this year.

A lot of headlines affecting the company.

Out today, the FAA audited the production of Boeing 737 Max found

dozens of failures in the manufacturing process.

This according to a big report in The New York Times.

Meantime, we learned earlier today that deliveries from Boeing trailed Airbus as

the 737 max crisis continued to slow factories.

And then all happening is the crisis. The company has started to spread to the

airlines that by its jet, such as Southwest, which I'm going to get to in

just a moment. Speaking of Southwest shares falling the

most. Yeah, I know.

I'm you know, I'm not doing a deep tease here.

I'm just going like go right to Southwest, down close to 15% today.

This is the most since March of 2020. At one point in the day, shares were

down the most since 2009. The company did come out and say that it

plans to reduce capacity by at least one percentage point this year.

It did say Boeing's continued challenges and a fluid delivery schedule.

Southwest does rely exclusively on Boeing for its fleet of 737 max aircraft

and then on holding finishing the day down today, let's see about 8.8%.

It did fall as much as 18% earlier in the day.

It issued first quarter and full year net sales forecast that fell short of

Wall Street expectations. It's a Swiss company.

They make shoes. You see them everywhere.

Fourth quarter net sales also missed the average analyst estimate.

Analysts did say, though, that despite the results, the company continues to

demonstrate positive momentum. Alex, do you have a pair of these shoes?

I don't have them yet. You know, I was literally being like on

holding. What do they look like?

Yeah, Carol's got them. You do?

Yeah. And they flat.

Yes. Light.

No, no, these are they're super light and they have like you almost feel like

you're walking on like bubbles walking and that's their whole thing and cloud

on cloud side. All right.

And take a look at yields, guys, because there was stuff that happened.

So after that CPI, you saw the sell off, you saw yields move higher pretty much

across the curve. Then you also have that auction for the

ten year that was kind of we get $30 billion worth there, 30 or tomorrow.

And then just crossing on the other central bank governor over in Europe

saying that the ECB is in broad agreement to cut rates in the spring,

which just leads to the whole, Hey, guys, June, maybe we see some kind of

central bank cutting cycle in the market, but then you get the hotter CPI

and then you get conflicted. Yeah, you know, and look, I mean, this

is all going to change or potentially change in a big way in about a week's

time. When we do, I'll get to the Fed meeting

and whatever communication they want to give.

But everybody's been trying to sort of, I guess, read these economic tea leaves

out of these economic reports here. But maybe they should just be, I guess,

looking at, you know, the real world. I guess in time I get some tea.

I was told you were out in the Hamptons this weekend shopping for a home.

I was not. I was.

Yeah. Nice.

Nice. No, no.

But there are many that are out there this weekend.

And apparently home sellers are ready to buy some, buy a bunch of properties, and

they're also ready to sell some properties.

So they have been doing Open house is out on the east end of the market that

one that was on right now I don't know what that is, but I'm guessing it might

be a little outside my price range. Three homes with asking prices of 20

million or more reached the market in February.

That's up from just one last year. So if that's enough for you, there's

might be maybe a six or 7 million in time to put some of that cash to work,

remain cash out that cash on the sidelines currently not safe.

Well, speaking of real economic indicators, there's another one that we

can look at, too, which is music festivals, because at least ten of them

have been canceled in the US this year because prices have been going up.

A lot of the price rise is being driven by the bands themselves, which are

asking for higher prices because of course they lost income during the

pandemic. So they're trying to make up for all of

that, but everything's more expensive. I think it's because nobody actually

likes music festivals and you know how to rent television

without a music festival. The bands, the bands don't even want to

go to music festivals. Yeah, I have never seen Coachella.

You know what? I said this earlier.

There's nowhere to sit, There's no bath. You're surrounded by people you don't

know. Is there a worse way to spend a weekend?

And it rains all the time, so it's terrible you're getting sunburned.

Or maybe all the people are just getting older like us.

I think that's the main thing. You've been to a music festival

recently. I have.

And I'll say this, I think it's it's time for consolidation, as they say It

was. Honestly, it was just too many of them.

I mean, I don't I mean I mean, Ted talks about all the negative things.

You know, there's a lot of good things about the festival.

Go on. But but the point is, you think about

how many of these things can come down the pike and how many.

It's like the same kind of is or a lot of overlap in the artists.

And it's like, I don't know, there's only so much to go around.

Like, you know, I don't need to see Ty Dolla sign five different times and one

summer. I also think that there's this idea, you

know, if you want to spend serious money on a concert, you're going to spend that

money to go to someone you really want to see and not all of the other acts as

well. So like not the headliners that, you

know, you have to put up with all the other bands too, to wait to see that.

The good thing about getting older, though, is like all my favorite acts,

they understand the struggle. Tell me they're going to be seats.

It's going to be, you know, it's going to start early, you know, and before 10

p.m. to 3 p.m.

on Saturday night. That's

one of the most recent concerts I went to about a year ago.

We did sell the floor tickets for seats later.

You know, as we got closer to the date, I was like, I was a little optimistic

when I bought those floor seats. Yeah, we want to see.

We might want to see my legs get tired. Absolutely.

For me, if we want a bathroom. All right.

That's a wrap across our across bathroom coverage, guys.

Beyond the Bell, radio, TV, YouTube, Bloomberg Originals.

We will see you again. Same time, same place tomorrow.