Investing Update: Mag 7 Selloff Justified?
What I'm buying, selling & watching
Not every week is a winner. This was not one of them.
The S&P 500 fell 2.0% on the week, closing at 7,354. Still up 7.4% on the year. The Nasdaq had the rougher week, dropping 4.6% and hitting its lowest level in two weeks. First negative week for both indexes in three.
The Dow told a different story. Up 0.6% on the week. Three consecutive winning weeks now for the blue chips.
The Russell 2000 quietly continues to be the story nobody is talking about. Up 1.0% on the week and up 20.4% on the year. Small caps are running.
A few numbers worth noting. The 10-year Treasury yield fell to 4.37%. Oil dropped 8.3% on the week. Bitcoin is down 31.7% on the year. Gold gave back 2.9% this week and is now slightly negative on the year at -6.1%.
One rough week does not change the trend. The market is still up. The internals are still healthy. We will get into all of that below.
Market Recap
Weekly Heat Map Of Stocks
Sentiment Check
For the first time in six weeks, bulls have overtaken the bears. The sentiment shift is official. The bulls are back in charge.
The Swoon Ends, July Begins
I wrote about the June Swoon last week. It is playing out exactly as history said it would.
The painful part is almost over. Almost.
The rough patch historically hits hardest in the final third of June. That is where we are right now. The “You Are Here” arrow on that chart is not a fun place to be. But it does not last. History shows the market tends to recover into the end of the month and set up for what comes next.
What comes next is July.
July is historically the best month of the year for average stock market returns. Not top five. Not top three. Number one.
And recent history backs it up. The Nasdaq has been the standout performer in July over the last 21 years. The S&P 500 and Dow have delivered consistent gains as well. Even in midterm years, July ranks among the strongest months on the calendar.
The June Swoon is almost over. July is right around the corner. Seasonality is about to flip from headwind to tailwind.