- Moving the markets
The Dow managed to squeeze out a tiny gain for the 9th day in a row, but the rest of the market was not so lucky. The S&P 500 fell, and the Nasdaq took a big hit.
Johnson & Johnson’s strong earnings helped the Dow, but there was no sign of a short squeeze to boost the stock further. The market was weighed down by mixed earnings results, as Netflix lost 8% and Tesla dropped 9% due to production woes.
The Nasdaq also suffered from the news that Taiwan Semiconductor, the world’s biggest chipmaker, cut its revenue forecast for 2023 by half.
The economic news was not much better, as US home sales plunged in June, the Philly Fed index showed another month of shrinking manufacturing activity, and jobless claims rose to their highest level since January.
Commercial real estate continued to struggle, as another office tower in Baltimore was sold at a huge discount. This was not surprising, as many downtown buildings are losing tenants who prefer to work from home or elsewhere.
The Economic Surprise index fell again, while bond yields rose and lifted the dollar to a one-week high. Gold slipped but stayed above $1,970.
It seems like the market is ignoring the bad news and hoping for the best, but how long can this last?
- “Buy” Cycle Suggestions
The current Buy cycle began on 12/1/2022, and I gave you some ETF tips based on my StatSheet back then. But if you joined me later, you might want to check out the latest StatSheet, which I update and post every Thursday at 6:30 pm PST.
You should also think about how much risk you can handle when picking your ETFs. If you are more cautious, you might want to go for the ones in the middle of the M-Index rankings. And if you don’t want to go all in, you can start with a 33% exposure and see how it goes.
We are in a crazy time, with the economy going downhill and some earnings taking a hit. That will eventually drag down stock prices too. So, in my advisor’s practice, we are looking for some value, growth and dividend ETFs that can weather the storm. And of course, gold is always a good friend.
Whatever you invest in, don’t forget to use a trailing sell stop of 8-12% to protect yourself from big losses.
- Trend Tracking Indexes (TTIs)
The market was spooked by a slew of disappointing economic news, and the S&P and Nasdaq ended the day lower. Our TTIs also retreated, but they held up better than the indexes.
This is how we closed 07/20/2023:
Domestic TTI: +7.02% above its M/A (prior close +7.14%)—Buy signal effective 12/1/2022.
International TTI: +8.98% above its M/A (prior close +9.09%)—Buy signal effective 12/1/2022.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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