MARKET UPDATE JULY 2024

Through the end of last week, the bull market in stocks continued to reach all-time highs.  And the underperforming Russell 2000 (small cap stocks) finally began to move higher – see the uptick for the grey line on the far right of the graph. 

This week has seen a reversal with the S&P declining 1.4% for the week and the Nasdaq down 3.0% this week (as of Thursday afternoon).  Nasdaq and S&P prices are getting overvalued, so a pullback is not too surprising after the big move higher over the last eight months.

It will be interesting to see if the falloff this week is just a minor pullback or if it is something bigger. The economic news has been mostly positive with inflation continuing to fall and expectations for a Fed rate cut growing.  GDP is slowing down slightly but this has been expected following the Fed rate increases.  If investors think the GDP slowdown might turn into a recession, stocks will continue to fall. 

At this time, my guess is this week’s activity is a minor pullback, but we will keep a close eye on job reports and economic data. 

Between November of last year and July 12th this year, the S&P 500 and the Nasdaq (top two lines) have moved sharply higher.  Both the S&P 500 and the Nasdaq are at all-time highs.  Notice how the Russell 2000 (bottom line) is still in a bear market – sitting about 12% below its previous high in November of 2021. 

Our customers have posted huge gains since November of last year as we have been “all in” on stocks.  The S&P 500 has gained 33% since November 1st.  And our customers can be extremely confident knowing that our Market Signals system will move them to cash if the market declines significantly.    

When you have downside protection, you can be comfortable putting 100% of your money in stocks and getting the big gains in bull markets.  You can also sleep better at night. 

Without an investing system like Market Signals, investors are forced to shift money to lower performing and safer assets before the bull market is over or be willing to get crushed in a bear market decline.

Stay Disciplined My Friends,

Phil

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