Please take a moment and register for our member’s only webinar, August 2024 Outlook and Update on Wednesday July 31, 2024, at 4:00 PM EDT (change in time due to FOMC Meeting) 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 August, 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
7/25/2024: Dow 39935.07 | S&P 5399.22 | NASDAQ 17181.72 | Russell 2K 2222.98 | NYSE 18344.46 | Value Line Arith 10534.85
Seasonal: Neutral. August is the worst DJIA and second worst S&P 500, NASDAQ, Russell 1000, and Russell 2000 month over the last 36 years, 1988-2023, but in election years August has been stronger. Election-year August ranks #4 DJIA, #5 S&P 500, #1 NASDAQ, and #2 Russell 2000. Average election year gains range from 1.1% by DJIA to 3.5% from Russell 2000.
Fundamental: Soft. Today’s advance estimate of Q2 GDP did accelerate to 2.8% with a pickup in consumer spending and inventories, but also a downturn in residential investment. Inflation is slowly cooling but is still stubbornly above the Fed’s stated 2% target. Corporate earnings have been mixed and AI investment is eating into bottom line profits. Unemployment continues to tick higher and at 4.1% is at its highest level since December 2021.
Technical: In retreat. After surging to new highs in the first half of July, DJIA, S&P 500 and NASDAQ have come under pressure. What began as a rotation out of tech and into anything else, especially small caps and the Russell 2000, has manifested into a pullback from recent highs ranging from –3.3% by DJIA to –7.9% for NASDAQ. S&P 500 and NASDAQ are below their respective 50-day moving averages. DJIA is closing in on its 50-day moving average while Russell 2000 continues to hold onto the majority of its recent gains. Levels to watch are DJIA 39000, S&P 5390/5265, and NASDAQ 17000/16500.
Monetary: 5.25 – 5.50%. Next week the FOMC will meet again, but no interest rate change is expected. Based upon the CMEGroup’s FedWatch Tool we will all need to wait until their September 18, meeting for an interest rate cut as the odds of a July cut are currently less than 10%. It is hard to see how much, if any, boost an 0.25% reduction in interest rates will produce. It is also challenging to see an aggressive rate cut cycle while inflation is still stubbornly above the Fed’s 2% stated target.
Sentiment: Euphoric. According to
Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 64.2%. Correction advisors are at 20.9% while Bearish advisors numbered just 14.9% as of their July 24 release. The spread between bulls and bears now exceeds what is it was in March. A cautious stance is warranted at this time as better opportunities may be had later this year.