The Dow Has Been Playing A Rapid Game Of Catchup

Dow Domino's Pizza J B Hunt Positive Earnings Enovix Valero Energy Enovix Microbot Medical stock markets

In his Daily Market Notes report to investors, Louis Navellier wrote:

Stocks grind higher, interest rates softer, gold breaks above $2,000, crude higher.

Dow Catching Up

Another big week of earnings, with Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday. Earnings have not disappointed overall and allowed the market to book further gains in July. The S&P is up over 3% for the month and may hit +20% YTD. The NASDAQ is up almost 4% for the month, 38% YTD. QQQ is up 3.8% in July, 45% YTD. The Dow has been playing a rapid game of catchup this month with its 13-day positive run and is up 3.1% for July, 7.1% YTD. The Russell 2000 had the best July, up 5.7% for the month, +14.1% YTD.

Gold showed some volatility last week, dropping rapidly below $1,945 on Thursday when the whole market shuttered on the Japanese debt policy change, and then staging a full recovery just as fast on Friday to the highest price since May.

Crude oil is up 1% to $81.50/bbl, the highest since April, and May lead to inflationary pressures, seeing gasoline having the highest one-day increase in over a year last week, now up 22% YTD, with gas in California approaching $5 a gallon.

We got further signs of continued weakness in US manufacturing, with the Chicago Purchasing Manager Index coming in light and its 11th month in a row of reflecting contraction. The Dallas Fed Mfg Business Index was above forecast but still had its 15th month of contraction.

Growing Credit

The consumer remains the strength in the market, though lower net worth consumers continue to grow their credit card balances which now have very high interest rates. On that front, Congress is considering a Credit Card Competition Act, in an effort to break the dominant Visa-Mastercard duopoly, though the timing of getting it passed remains uncertain.

Imminent Correction

Earnings remain the focus with the Fed behind us. Some investors, concerned with the high earnings multiples of the indexes, are starting to say that a “normal” correction is overdue but may be delayed as more money comes in from the sidelines.

Outperformance from here will likely take some good individual stock picking.

Coffee Beans: Happy as a Clam

A Rhode Island woman found a pearl in a clam she was served at a restaurant in 2021, and it ended up becoming her engagement ring when her boyfriend proposed two years later. The 9.8-millimeter pearl is estimated to have been growing for 50 years. Source: UPI. See the full story here.