Stock market recuperation
With steady to strong index gains in the most recent week, the stock market recovered.
Last week’s stock market trading saw an increase of 0.8 % in the Dow Jones Industrial Average. S&P 500 index increased by 1.9 %. The Nasdaq composite increased by 4.6%. The Russell 2000 small-cap index increased by 2.4 %.
After falling to 2.75 % intraday on Wednesday, the 10-year Treasury yield increased by 13 basis points to 3.1 %. After briefly exceeding the 10-year rate, the 2-year yield increased to 3.1 %.
U.S. crude oil futures dropped more than 3% in the previous week, but only after Wednesday’s plunge well below $100 a barrel.
Despite the fact that employment is typically a lagging indication, Friday’s June jobs report was stronger than anticipated. In contrast to last week’s estimate of -2.1 %, the Atlanta Fed’s GDP projection tool now predicts a second quarter annualized loss of just 1.2 %.
The FedWatch program from the CME still predicts rate increases of 75 basis points this month and 50 basis points in September. However, it believes that a half-point move for the November meeting is more plausible, which is a change from recent forecasts of a quarter-point move.
The consumer price index for June, which will be released on Wednesday, is predicted to show an increase in inflation to 8.8 % from 8.6 % in May. Although gas prices peaked on June 14 and only slightly declined the remainder of the month, they are already declining. While headline inflation appears to be on the fall after June and core inflation probably moderated slightly last month, another supersized 75-basis-point rate hike appears destined for the late July meeting.
ETFs
The Innovator IBD 50 ETF (FFTY), one of the best ETFs, increased 1.6 % last week, while the Innovator IBD Breakout Opportunities ETF (BOUT), one of the finest ETFs, increased 1.5 %. The iShares Expanded Tech-Software Sector ETF (IGV), which includes the stock of FTNT, increased by 4.4 %. SMH, the VanEck Vectors Semiconductor ETF, increased by 6.45%.
The SPDR S&P Metals & Mining ETF (XME) dropped 1.5 %, continuing its recent week of declines. 0.7 % growth was seen in the Global X U.S. Infrastructure Development ETF (PAVE). U.S. Global Jets ETF (JETS) closed level, maintaining its position. The SPDR S&P Homebuilders ETF (XHB) increased by 3.2%. The Financial Select SPDR ETF (XLF) increased 0.6 percent while the Energy Select SPDR ETF (XLE) fell 2.25 %. UNH stock is a significant stake in the Health Care Select Sector SPDR Fund (XLV), which increased by 0.8 %.
The ARK Innovation ETF (ARKK), which tracks stocks with riskier narratives, increased 13.7 % last week, returning it to above its 50-day line. The ARK Genomics ETF (ARKG) increased 14.4%, leaping over the 50-day line. All of Ark Invest’s ETFs hold a significant amount of Tesla stock.
What should you do
The market rally is still “under pressure,” but the major indexes are in considerably better shape than they were a week ago and are about to make a significant improvement. Leading stocks are multiplying and behaving nicely.
Everything is still speculative. A sudden sell-off would be a bearish indicator, particularly if it occurred from the current levels. Recent purchases would become obvious losses after a few bad days, sending the indexes back down toward their lows.
As a result, gradually increase your exposure as the market and your positions progress. To lock in winnings, you might still take a small portion of winners’ profits. Be prepared to immediately reduce losses.
Work tirelessly on your watchlists this week. Make a comprehensive list, paying close attention to a few potential purchases in the following days.
The earnings season, which will begin to ramp up this next week, deserves special attention. Expect many corporations to fail or provide dire guidance in the face of high inflation, a strong dollar, and sluggish GDP. So pay attention to when your investments disclose earnings or when important competitors are scheduled.