Downside Protection

Here is some more useful information for dealing with a falling market via this week's WealthTrack program on PBS hosted by Consuelo Mack. In this episode she interviews Charlie Dreifus of Royce Investment Partners on the whole topic protecting your downside. Hope everyone enjoyed the beautiful weekend. We're heading for major heat again this week.  

12 Terms Every Investor Needs to Know

For this last weekend in July I thought it would be nice for some light summer reading to get back to basics.  This week's U.S. News Invested not only reintroduces us to the meanings of 12 essential terms of investing but also provides an investing dictionary, something that along with Investopedia should prove to be an invaluable resource in anyone's financial library.  Hope everyone is enjoying the wonderful weekend.  The big heat is coming back.  

S&P 500, Nasdaq register biggest monthly gains since 2020

We just closed out the biggest month in two years with a third consecutive day of big rallies.  Apple and Amazon’s strong numbers bolstered confidence that the megacaps are able to navigate through these tough times and for a second day the contracting GDP was taken as good news supporting speculation that the Fed will slow down. All three indexes gained for both the month and the week with the S&P up 9.1% for July, the Nasdaq up 12.3 percent. 279 S&P companies have reported, 77.8% beating estimates and earnings growth now forecast at 7.1%, way up from the 5.1 just two weeks ago and even surpassing the much more optimistic 6.8 from four months ago.  Volume was again above the 4-week average at 11.3 billion. 

Wall St ends up sharply for 2nd day; Amazon.com, Apple jump after hours

The Dow was down over 200 points by 10 a.m. but quickly reversed course to begin a continuous climb for the remainder of the day to close up 332.  It must have been about that time that the GDP report was issued showing another contraction in Q2 indicating the possibility of recession. They called it “unexpected” but it wasn’t really. The financial media has noted for some time now that a Q2 contraction was expected. But the contraction is also an indication that the Fed could slow down a little and evidently that was more important than the prospect of recession because it triggered an immediate buying spree almost as energetic as yesterday’s.  Adding to the excitement were megacaps Ford, Amazon and Apple shooting up due to beating Q2 estimates. For once volume was above the 4-week average at 11.2 billion. 

Nasdaq has biggest one-day jump since 2020 after Fed rate hike

All the indexes were up nominally all day until about 2 pm.  Then the Dow shot up almost 600 points after 2 pm, then came down a bit in the last half hour to close up 436.  The Nasdaq did even better. So it must have been right around 2 pm that the Fed made the announcement of the ¾ point rate hike. Powell’s comments were taken by investors as hope for a slower pace of hikes and was considered calming. That taken in combo with more better than expected Q2 and everyone went on a buying spree.  Megacaps Microsoft and Alphabet also zoomed further adding to hopes that the recent rally might continue.  Volume was much closer to the 4-week average at just under 10.6 billion. 

Indexes drop as Walmart profit warning spooks investors

On the day before the expected rate hike, all three indexes went way south with the nation’s biggest retailer sinking 7.6% on the announcement that it was cutting its full-year profit forecast, news that also sent several other heavy hitters plunging as well as the entire S&P retail index.  Adding to the gloom was a report showing consumer confidence had dropped to a 1-1/2 year low.  This was despite the fact that the majority of Q2 reporting thus far has beaten estimates but Amazon created the biggest drag in announcing it would raise Amazon Prime fees by a whopping 43 percent. 

S&P 500 ends choppy session nearly flat; investors eye Fed, earnings

It was a choppy session to say the least with the Dow bouncing back and forth between about 100 up and break-even 5 times during the day to finally close up 90.  This is the week of the next expected Fed rate hike to be announced on Wednesday and also a big week for Q2 with 170 new reports due.  The Q2 earnings growth forecast has grown again now at 6.1% vs 5.1% two weeks ago and edging nearer again to the 6.8% estimated at the beginning of Q2.  Housing data due Tuesday is expected to confirm that inflation continues to cool. Volume continues below average at just under 9.4 billion.