Please take a moment and register for our member’s only webinar, July 2024 Outlook and Update on Wednesday July 3, 2024, at 1:00 PM EDT here:
Please join us for an Almanac Investor Member’s Only discussion of recent market action with time for Q & A at the end. Jeff and Chris will cover their outlook for July, review the Tactical Seasonal Switching Strategy ETF, Sector Rotation ETF, and Stock Portfolio holdings and trades. We will also share our assessments of the Fed, inflation, NASDAQ’s “Worst Months,” the election as well as relevant updates to seasonals now in play.
If you are unable to attend the live event, please still register. Within a day of completion, we will send out an email with links to access the recording and the slides to everyone that registers.
After registering, you will receive a confirmation email containing information about joining the webinar and a reminder message.
Market at a Glance
6/27/2024: Dow 39164.06 | S&P 5482.87 | NASDAQ 17858.68 | Russell 2K 2038.34 | NYSE 18009.09 | Value Line Arith 10124.26
Seasonal: Neutral. July is the #1 S&P 500 and NASDAQ month over the last 21 years, but July is the first month of NASDAQ’s “Worst Months” and election year performance has been softer. Election-year Julys rank #6 for DJIA and S&P 500 since 1950, #9 for NASDAQ (1971) and #10 for Russell 2000 (1979).
Fundamental: Softening. Today’s third estimate of Q1 GDP was revised higher to 1.4%, but the improvement came with a downward revision to consumer spending. Weekly initial and continuing jobless claims have been ticking higher along with the unemployment rate. This all suggests that the labor market is softening. Interest rates are still elevated due to persistent inflation that has thus far refused to return to around 2%. If the consumer continues to retreat, it will not be long before corporate earnings could take a hit.
Technical: Mixed. Fueled by AI enthusiasm, NASDAQ and S&P 500 closed at new all-time highs in June, while DJIA has lagged behind. NASDAQ and S&P 500 remain well above their respective 50-day moving average, DJIA appears unable to break away from its 50-day moving average in either direction. Weekly market breadth and weekly New Highs/Lows data is currently signaling fading participation in the rally. Overlaid with seasonal factors that will turn more bearish in the second half of July, the market is suspectable to a mild single-digit retreat. Should that transpire, levels to watch are: DJIA’s 200-day moving average around 37150, S&P 500 5250 and NASDAQ 16700.
Monetary: 5.25 – 5.50%. The best educated guess we can offer is for perhaps one, maybe two small 0.25% rate reductions later this year by the Fed. This is based upon current inflation metric trends and current economic data. The CMEGroup’s FedWatch Tool is slightly more optimistic with a 64.1% chance of a cut at the Fed’s September meeting. Some of the stellar year-to-date market gain is surely in anticipation of the Fed cutting rates. Eventually something will give. Either inflation will retreat, and a soft landing will occur, or the economy has a hard landing and the Fed is forced to cut.
Sentiment: Frothy. According to
Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 61.5%. Correction advisors are at 20.0% while Bearish advisors numbered 18.5% as of their June 26 release. Bullish sentiment has soared to just below its recent peak of 62.5% at the end of March just ahead of April’s decline. A cautious stance is warranted at this time as better opportunities will likely arrive later this year.