Wall Street ends August with a whimper on Fed worry

It was the fourth straight day of triple digit declines (or more) for the Dow and not much better for the S&P and Nasdaq. The day’s open started fine with all three indexes in the black, the Dow up almost 200.  But the rest of the session was another disturbingly steady decline due to persistent worries over rate hikes bringing the Dow down 280 points by close. August closes with the biggest market decline in 7 years with the S&P dropping more than 8% in just the last two weeks. Today’s expert says that what we saw a couple weeks ago was just a bear market rally with now renewed concerns about going to a new low after so much optimism earlier that the indexes had reached their lows. 

Wall St closes down for 3rd straight session on Fed rate hike worry

Yesterday’s expert who opined, “I don’t see a whole lot of upside or downside here in the near term” was already proven wrong just one day later with another big 3-digit loss on both the Dow and Nasdaq, 308 down on the Dow.  Today’s data showed more that 11.2 million new job openings in July (plus June was revised sharply higher) which threw more panic in the fire that the Fed must continue rate increases in order to cool down demand and decrease the need for labor. Of course the big fears is that this will lead to layoffs and recession. 

Wall Street retreats as rate hike concerns persist

Friday’s panicky selloff over feared Fed policy continued into Monday, albeit with a good deal less panic, but nonetheless wreaking triple digit losses again.  Dow was down some 300 points in the morning, then bounced back to break-even four time in the afternoon as late as 3 pm before diving again in the final hour to close down 184. A similar pattern was seen in all the indexes as volatility reigned.There was just one voice of reason from Charles Schwab, “Friday’s selloff was frankly overdone. Powell hasn’t said anything different. I mean, geez, who is surprised by that, really?” And the good news is that the same expert’s opinion was that we’ve seen the bottom.  “I don’t see a whole lot of up or downside here in the near term.” 

7 Stocks That Are Good Inflation Investments

From the latest U.S. News Invested and in compliance with our continuing discussions on inflation, here is their list of the best bets for stocks that represent good hedges against inflation.  Hope enjoyed this beautiful weekend.   

Should You Buy Bonds When Interest Rates Are Rising?

In reviewing recent issues of the AAII Educated Investor, I thought this one from August 9th and its slew of articles was particularly relevant in terms of the current environment of interest rate increases, inflation, and the growing fears of recession.  Of particular interest is the key article "Should You Buy Bonds When Interest Rates Are Rising?"  We're having a wonderful weekend.  Let's enjoy it.  

Wall Street ends in a hole after Powell's Wyoming speech

Wow!  A quadruple-digit loss on the Dow and even the S&P suffered triple digits.  It seems Thursday’s exuberance was premature as the message coming from Jackson Hole was even worse than feared.  The clue came almost immediately when Powell prefaced his remarks by saying that today he was going to be unusually blunt, unusually direct because the circumstances called for more clarity.  And in his clarity he actually used the words “for some time” when referring to how long rates would remain up, and “some pain” when referring to how future Fed policy would impact households and businesses.  

Wall Street ends sharply up, fueled by Nvidia and Amazon

Even though the big bad speech isn’t until Friday, investors obviously decided today that things were not going to be so bleak after all and triggered another substantial rally with 3-digit gains across the Dow and Nasdaq.  This can be seen as either very rational or very irrational as the big trigger was a bad Q2 report from Nvidia which, for whatever reason, investors chose to interpret that the giant tech company had hit bottom and there were bright days ahead. Nvidia actually jumped 4% on the bad news and took the entire tech index with it as Apple, Microsoft and Google all jumped too.  There was also good news in a report today that showed the economy contracting lesser in Q2 than previously thought. The S&P is now down only 12% for the year vs 13% yesterday (vs minus 22% in June). Volume remains thin at 9.3 billion. 

Wall Street ends higher, with all eyes on Jackson Hole

On this the eve of Jackson Hole perhaps investors feel they have now positioned themselves for the expected bad news for the selling has stopped and all three indexes rose modestly though they were all higher earlier in the session.  It was a seesaw though with especially the Dow dropping to almost zero gains four times during the day before rising again after 3 pm to a modest 59 point gain.  Also contributing to the mixed activity was Biden’s announcement of forgiveness on some student loans, a move heralded by some as a huge help to college students and criticized by other as inflationary. 

Wall Street ends down as investors eye slowing economy

Today’s news of a second straight month of a contraction in business activity plus growing fears of a Fed announcement this Friday of another ¾ point rate hike has kept the market spooked with a third consecutive session of losses, particularly with the Dow plunging another 154 points.  Growth fared better than value with the Philadelphia tech index rising 0.7% and the Nasdaq closing at break-even and being up over a hundred points in the morning while the Dow and S&P were in the red almost all day.  Ordinarily this would indicate “risk on” but not today as reflected in the still very thin volume of 9.4 billion as investors stay on the sidelines waiting for Friday. 

Wall Street ends sharply lower on fears of aggressive Fed

What a rout!  Today, with both China trimming its lending rates and Russia announcing it will cut off natural gas to Europe for three days next week, global slowdown fears mounted and investors became increasingly concerned that the Fed will turn more hawkish at the meeting in Jackson Hole this Friday. So it was a straight shot down, major hits in the triple digits.  This of course means that if the news out of Jackson Hole turns out to be not quite so dire, there will likely be a big rally Friday.  But it’s a long time until Friday and who knows how much more fear will pollute the markets between now and then. The S&P is still down 13% for the year, the Nasdaq 20. Both the S&P and the Nasdaq declined 2.1% and 2.5% respectively just today, the Dow 1.9.  The good news is that volume was light at 9.9 billion, meaning everyone is on the fence waiting for better news. 

Growth Stocks Are Being Helped by Inflation Expectations

It's time for some positivity in recent market news as, courtesy of the AAII, as their analysis below makes the argument that growth stocks are being helped by all the speculation over inflation.  Hope everyone had a great weekend.  

10 of the Best Stocks to Buy for 2022

The latest and greatest from U.S. News Invested -- their picks of the top ten stocks for 2022.  Hope everyone is enjoying the Woodward Dream Cruise this weekend, starting at the one mile stretch on Woodward between 9 Mile and 10 Mile which has the notoriety of being the first paved road in the U.S., built in 1909, something I just learned tonight.  (According to the article, the rest of Woodward was paved by 1916.) 

Wall Street ends down as yields rise; indexes post weekly losses

It was a straight shot down today as with global interest rates rising, Germany reporting record high price increases and the 10 year note nearly brushing the 3% mark, it was risk-off in a big way with all the indexes falling, the Dow big time at 292 points. The whole tech sector plummeted as these are the most vulnerable to rate increases. With these concerns, all eyes will be on Fed Chair Powell’s speech next week in Jackson Hole. And though the S&P ended the week at a loss after four straight weeks of gains, the good news is that it is still 16% above its June low.  Yesterday at 9.4 billion was the year’s lightest volume. Today at 10 billion volume remains among the lowest for the year. 

Wall St ends higher, Cisco Systems jumps after forecast

As the markets continued to parse yesterday’s Fed minutes, yesterday’s optimism shifted to pessimism today over concerns that more aggressive rate hikes may be in the near future and thus all the indexes fell early in the session, the Dow down about 140 points. This was despite the fact that the forecast for September remains the desired ½ point hike. As today’s expert put it, “There are really two camps – one who feels the worst is behind us and continue to buy these selloffs, and the camp that feels the worst is ahead and this is some kind of bear market rally that will retreat.”  Cisco getting a 5.8% boost brought all the indexes back to break-even just before close and all three even enjoyed modest gains by close.  Volume was considerably below average at 9.4 billion. 

Wall Street ends down, but indexes briefly cut losses after Fed minutes

Yesterday, good Q2 retail reports pushed the market up.  Today bad retail reports pushed the market down , the Dow down some 320 points by noon but then at 2 pm the Fed published its minutes that, while remaining firm in its commitment to fight inflation also pointed to a strong likelihood of a ½ pt increase next month rather than the dreaded ¾ point. This pushed the index up almost to break-even by 2 pm but then fell again to close about 50% above the session low. The retail index fell 1.2% even though consumer spending appeared to pick up.  Target was hit especially hard falling 2.7% after reporting a 90% drop in Q2 earnings.  Volume was a tad below average at just under 10.8 billion. 

Dow, S&P 500 climb as upbeat results from Walmart, others boost optimism

Q2 reporting from the retailers came in strong today, especially from Walmart, which boosted the value-heavy Dow, but Treasury yields rising at the same time weighed on the tech and growth-heavy Nasdaq.  The S&P has rebounded 14% in six weeks and optimism has increased for a soft landing from the Fed. As today’s expert put it, “Investor sentiment is still bearish but no longer apocalyptically so.”  Volume was just a tad below average at 10.9 billion. 

Wall Street climbs, adding to recent gains as megacaps rise

It was another triple-digit gain on the Dow as investors continued to express increased confidence that the Fed would begin cutting rates sooner rather than later and that there would be a soft landing rather than a major recession.  It was risk-on again as dollars flowed back into the growth stocks which outperformed value today. Retailers will be bringing in their Q2 reports this week which will provide still another major metric on inflation. Volume was well below average at just about 9.6  billion. 

FED POLICY, RECESSION PROSPECTS & THE MARKETS

This latest segment of the PBS WeatlhTrack program addresses the topics that have been most important during the past few months -- the Fed and Recession and how these are impacting the Markets.  Hope everyone enjoyed the beautiful weekend.  

Top Stocks to Buy in All 11 Stock Market Sectors

It's been such a great week for the market that U.S. News Invested has a fresh new list of top stock picks across all sectors.  Enjoy.  And enjoy this wonderful cool weekend.  So glad to finally be off that intense heat.  

S&P 500, Nasdaq close up 4th straight week as optimism grows

Yesterday everyone backed off on fears that all the great news about inflation and the corresponding spike in consumer spending might trigger more rate hikes and greater odds of recession.  Today, with the S&P passing the magic 4,231 mark marking a 50% retracement from the June low, euphoria returned with both the Dow and Nasdaq seeing very handsome 3-digit gains. It turns out that by some metrics a 50% retracement marks the beginning of a new bull market so, as of today, we’re in a new bull market.  (Couldn’t it just as easily be argued that the bull market begins with the retracement which began in June?)  

Nasdaq, S&P 500 retreat as rate hike fears cool stock rally

Yesterday’s euphoria over the CPI report continued this morning with the Dow up about 350 right out the gate but then, despite the fact that today’s PPI report validated the CPI, the whole market went into decline, once again with concerns that whatever the good news about inflation may be, the Fed may well continue aggressive hikes. It’s not like there were any new announcements along these lines. There’s nothing we learned new today about the Fed that we haven’t known for some time. And though the consensus remains that peak inflation has occurred, there is still the uncomfortable fact that there is too much spending power out there which must be reined in with more hikes. In other words, after yesterday’s euphoria, today it was risk-off again.  Volume was a little above average at 12.3 billion. 

Wall Street rallies as cooling inflation eases rate hike fears

The CPI report came in much better than expected finally giving the market hope that inflation is starting to come down and that there may very well be a soft landing. The 12-month inflation rate had been running at 9.1% in June and is now substantially reduced to 8.5%, and the forecast for a ¾ point rate hike in September has now been lowered from 68% to 43.5.  All in one day! All the indexes had big gains with the S&P now up 15% from the June low and need only climb another 12% to once again meet the record January high. It was the first positive reading on inflation since the Fed started the rate hikes and the VIX has also fallen substantially now under 20 and at a four month low.  Volume was a little above average at 11.3 billion. 

Nasdaq closes lower as chipmaker Micron's warning renews tech rout

It was another quite choppy day with the Dow dipping as much as 130 points in the red several times before rising to a close 58 down.  As was the case yesterday, investors are sitting on the fence waiting for Wednesday’s CPI report to get another read on inflation. Labor costs continued rising in Q2 but not as fast as Q1. There was the statement from one expert that inflation right now is supply driven so the Fed tightening to crimp demand will have limited impact. This is not really accurate. Supply and demand are intimately intertwined so any action that reduces demand will also help ease supply concerns. 

Wall Street closes little changed on Fed policy fears

The Dow was up as much as 300 points in the morning only to come crashing down shortly after 11 to finally settle near break-even at close.  The high was the market still confident that the big job numbers from last week might prompt more rate hikes but that the economy would be okay anyway. In the afternoon, the concerns migrated once again over fears of recession and hedging bets awaiting Wednesday’s CPI data for a better reading on inflation. Volume came in at 11 billion. 

7 Best Cheap Stocks Under $5

Again U.S. News Invested has their recommendations for stocks for the low income investor. This is certainly information that won't hurt any portfolio.  Hope everyone survived this scorcher of a weekend.  But chin up, much better weather coming Tuesday.  

AAII Investing Ideas Earnings Are In: Should You Invest in These Social Media Companies?

This week's edition of the AAII newsletter is a rather detailed analysis of the pros and cons of buying the three hottest social media companies -- Snapchat, Facebook (now Meta Platforms) and, of course, Twitter. It'll take several minutes to go and probably more minutes still to digest but it should be time well spent.  

S&P 500 ends down as jobs data rekindles rate hike fear

Dow spent most of the session 200 points in the red.  The jobs report was not what was hoped, with many more jobs being added than desired thus stoking more inflation fears and more rate hike fears even though it does point to upbeat economy.  The fears again are that the Fed will bet too aggressive and trigger a deep recession. Alas, the real picture will be revealed next week with the inflation report.  Volume was a little below average at 10.6 billion. 

Wall Street ends mixed as investors eye jobs data

It was a day to take a breath after the recent strong bounce as gains in tech were balanced by losses in energy and as investors wait for Friday’s jobs report. They are estimating 250,000 new jobs. If the numbers come in higher it may trigger fears of more inflation and more Fed tightening. The S&P has recovered 14% from the January record high but needs another 13% to be even for the year. Volume remains a little above average at just under 11.4 billion. 

Nasdaq ends at three-month high as PayPal fuels optimism

No seesaw today, it was just a shot straight up for all the indexes with services industry data picking up in July and supply chain problems and price pressures easing. This added confidence that the economy was not in recession after all despite a declining first half which has always meant recession in the past. Tech got the biggest benefit with all the major players getting a boost but especially PayPal with a 10% climb.  And contrary to yesterday when everyone still feared more Fed aggression, today that reversed with everyone more confident that the worst of the hikes was behind us. 

S&P 500 ends see-saw session lower as Pelosi visits Taiwan

The Dow 350 down in the morning, then rising to almost break-even by 1 pm, then a steady decline to close just over 400 down. Two triggers today: 1) China’s threats against Pelosi visiting Taiwan and the impact that might have on all our stocks that due business in China. 2) The general uncertainty over the potential impact of the rate hikes. Today’s sentiment was much the same as yesterday’s – the market is not yet comfortable with the rate hikes and challenges and supply constraints aren’t necessarily done yet.  But even with today’s downturn, the S&P is now 12% above the low from mid-June.  Volume was a tad above average at 11.2 billion. 

Wall Street ends down after biggest month since 2020

It was a seesaw session as the Dow floated between red and black four times, down as much as 200 and up as much as 130 before settling at close down 46.  The other indexes were also modestly down. Uncertainty rules as investors continue to digest last week’s big rally and as today’s expert put it, “There are still a lot of questions about whether we are really out of the woods economically, and we probably aren’t.” (Of course we probably aren’t but we’re getting closer!)