Following the destruction that was June, July was a complete reversal for the major US stock indices which had their best month of the year. The NASDAQ was the standout rising 12.35% for the month. The Dow industrial average rose 6.73% and the S&P index rose 9.12% which was the best month since November 2020. A difference a month makes, the S&P 500 fell 20.6% through January to June 30, 2022, suffering its worst first half of a year since 1970 when it declined 21.0%.
You could argue not much has changed, Sentiment is still cruelled with inflation soaring as commodity prices hit 40-year highs, the yield on the benchmark 10-year Treasury is back under 3.0% however and the average for a 30-year fixed-rate mortgage is down from 5.81% to 5.2%. This was the highest level since November 2008 and well above the 3.11% recorded near the start of the year. These higher yields hurt tech and growth stocks, making shares of firms whose profits may lie further out in time less attractive. We had most of the major tech’s report with mixed results, most beating other than Intel. The market seems one that was short and expecting the worse. Furthermore, the Fed did a magical job selling back-to-back 75 basis point hikes as a good thing.
July 2022 S&P rose 9.12% the best month since November 2020
For July 2022 Dow industrial average rose 6.73%
For July 2022 NASDAQ rose 12.35%
What a Difference a Month Makes
In the first half of the year the technology heavy Nasdaq Composite was hit harder, it crashed to its worst first half yearly performance in its existence. Interest rates did the damage, investment-grade bonds, as measured by the iShares Core U.S. Aggregate Bond exchange-traded fund, lost 11%, their worst start to a year in history. The ongoing market volatility and headwinds couple with record low consumer sentiment destroyed any structure of positivity. Trillions of dollars in market value were wiped off. The S&P 500 closed -1.0% on June 30, meaning down 16.4% for the quarter and -20.6% for the year.
How we finished July 2022
The major stock indices are ending with solid gains for the day:
- Dow industrial average rose 315.50 points or 0.97% at 32845.14
- S&P index rose 57.86 points or 1.42% at 4130.28
- NASDAQ index rose 228.10 points or 1.8% at 12390.70. That’s a largest increase cents April 2020
- Russell 2000 rose 12.20 points or 0.65% at 1885.23
For the trading week.
- Dow industrial average rose by 2.97%
- S&P index rose 4.26%
- NASDAQ index rose 4.7
For the trading month the average had their best month of the year:
- Dow industrial average rose 6.73%
- S&P index rose 9.12% which was the best month since November 2020
- NASDAQ index rose 12.35%.
The July Bounce in the S&P …
For July every sector $&P advanced, 3.1% (consumer staples) to 18.9% (consumer discretionary) pumped by Tesla (TSLA) and Amazon.com (AMZN). The consumer discretionary sector, which is still down 20.4% for the year.
….. a comeback from the Half Year Swoon
H1 2022 was brutal for many tech heavies, Tesla dropped 37%, Nvidia fell 49%, AMD declined 47%, Meta slid 53% and Netflix was skinned for 71%.
Major US Indices H1 2022
- Dow Jones Industrial Average: -15.3% YTD
- S&P 500: -20.6% YTDS&P 400: -20.2% YTD
- Russell 2000: -23.9% YTD
- Nasdaq Composite: -29.5% YTD
They realization of risk and overvalued stocks took a while as the market has lived in denial but the Federal Reserve raising interest rates, soaring inflation and the slovenly economy has brought stocks sharply lower from the record levels they started the year. The latest gross domestic product data showed that the economy recently contracted for the first time since early in the pandemic. The most recent earnings season has been dotted with some high-profile casualties, delivering head-spinning one-day crashes following the reports.
When Risk Explodes:
Nasdaq from the Worse to Top 3 in a month
Nasdaq 100 Second Worse Performing Future in H1 2022, Heating Oil the Best
The Tech Wreck Had Been Travelling Down Fast & Rebounded in July
The FAANG stocks, consisting of the popular quintet of Facebook parent Meta Platforms, Apple, Amazon.com, Netflix and Google parent Alphabet, have lost $trillions combined in market value this year.
From The Traders Community Research Desk