To The Moon

On the last day of July, all three major U.S. stock indices closed the month with gains. 1. July marks a winning month! $DJIA(.DJI)$ recorded a 3.1% increase this month, marking the largest two-month gain since November 2022. $S&P 500(.SPX)$ also had a positive month, rising by 2.9% in July. It has now experienced five consecutive months of gains, making it the longest continuous upward trend since August 2021 and achieving the largest five-month percentage gain since June 2021. $NASDAQ(.IXIC)$ performed particularly well, with a 3.7% increase in July, marking the fifth consecutive month of gains for the index and its largest five-month percentage gain since September 2020. The market's strong performance in July was fueled by optimism among investors as economic data and earnings reports continued to deliver positive results. These gains further bolstered what has been a robust year for the market. 2. August will be dominated by sector rotation? In August, one of the main investing themes dominating the US stock market is sector rotation. This phenomenon involves a shift in investor preferences from one sector or industry to another. During the last weeks of July, the rise of weighted stocks extended its influence to other mid-cap and small-cap stocks, continuing to drive the overall upward momentum of the US stock market. For one thing, the big-tech giants like $Microsoft(MSFT)$ and $Tesla Motors(TSLA)$ failed to deliver positive surprises in their earnings reports during this season, potentially dampening investor enthusiasm for these stocks. For another, investors have turned their attention to second-tier growth stocks such as $Affirm Holdings, Inc.(AFRM)$ , $fuboTV Inc.(FUBO)$ , and $Jumia Technologies AG(JMIA)$ , which have seen significant jumps of around 20% in their stock prices without any major price-sensitive news. This indicates a focus on growth stocks and their earnings potential. 3. More volatility due to August curse? As we move into August, there are concerns about potential increased volatility in the indices. The market has experienced a prolonged period of unilateral growth, raising concerns about a potential correction. If the August inflation and employment data do not support the end of the rate hike cycle, there is a risk of a significant market downturn at any time. Historically, July has been a bullish month for the stock market, but as August approaches, market volatility tends to rise. Observing the quarterly average trends of the US stock market over the past two decades, August has shown increased fluctuations, suggesting caution and preparedness for potential market swings. Investors should carefully monitor economic indicators and corporate earnings during this period of sector rotation and increased volatility to make well-informed investment decisions. The US stock market remains subject to various factors, and having a diversified portfolio and risk management strategy can be beneficial in navigating these market conditions. How do you expect stock market in August? Leave your comments to win tiger coins! Rewards All valid comments on the following post will receive 5 Tiger Coins. The First 10 and Last 10 Commentator with qualified comments will receive another 10 Tiger Coins.