Weekly Stock Market Update & SPY Technical Analysis Markets experienced their highest level of volatility in years last week after fears of a recession resurfaced. Although volatility eased as the week progressed, nerves remain high about what could happen this week. The focus now turns to inflation data, which will be critical to watch. With recession fears on the rise, markets are hoping the Fed steps in and follows through on its September rate cuts. However, that won't be possible if inflation exceeds expectations. The Consumer Price Index (CPI), which measures inflation, is expected to reflect a reading of 3% year over year, unchanged from last month's reading but still on the right track of gradual improvement. The retail sector...
Weekly Stock Market Update & SPY Technical Analysis It is estimated that nearly $3 trillion in value was erased from the stock market last week. While most headlines blame the latest unemployment reading, in reality, it was a combination of events that led to the sell-off. First, let’s start with earnings. The Magnificent Seven group of mega-caps—Apple, Microsoft, Google, Amazon, Nvidia, Meta, and Tesla—has been the backbone of the market rally this year, making their earnings extremely critical to markets. Although most of them met forecasts, their earnings weren’t strong enough to justify their valuations. Excitement around artificial intelligence boosted outlooks exponentially in the past six months, but investors faced a reality shock after this round of earnings, suggesting that...
Weekly Stock Market Update & SPY Technical Analysis The market volatility index (VIX) moved to levels not seen since April last week following a sharp technology sector sell-off. The catalysts behind the downside move were earnings from Tesla and Google, which reported mixed results that left traders uncertain about the remainder of the earnings season. Tesla, one of the world’s leading electric vehicle sellers and a top name in innovation, missed on profit estimates and declined more than 25% following the report. Google also sold off following their report despite topping revenue and profit estimates, which was likely a result of their YouTube ad revenue falling short of expectations. Weakness in ad revenue was seen as weakness for other media...
Weekly Stock Market Update & SPY Technical Analysis Markets tumbled lower last week as nerves around the election heightened, and an unexpected IT meltdown caused thousands of outages among different companies and industries. On the political end, markets are starting to weigh the chance of President Biden dropping from the race, which has been supported by top Democratic leaders. This, along with the assassination attempt on Trump, is causing strong turbulence in U.S. politics, which ultimately leaves markets uncertain. Both parties have their own agendas that bring about different implications for investors, markets, and taxes. As the odds of them winning shift back and forth, investors are likely to shift their sentiment along with those odds. Last week’s IT outage...
Weekly Stock Market Update & SPY Technical Analysis Small caps saw an influx of buyers last week and pushed the Russell 2000 to a new 52 week high, a long awaited move that has been months in the making. IWM, which is the Russell 2000 ETF, saw the largest surge of volume since February; however as it ticked higher, large cap stocks and indexes moved lower. This is a market phenomenon called capital rotation, a normal event that takes place when investors move capital from one sector or fund to another. The small cap index is one of the few major indexes that is yet to reach all time highs, strongly underperforming the S&P 500 and The Dow Jones, so...
