Stock Market Insights

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Stocks seem to be stumbling around like a drunk sailor. (No offense to all the Navy veterans in my family.)

Going into the third full trading week of July, the S&P 500 is still close to its all-time high, but the stock market seems to have stalled and hasn’t moved steadily higher since late in June.

Rising COVID hospitalizations have triggered some selling off, most notably was the significant drop on July 19th. A new wave of COVID is happening at a time when the market is already nervous about the possibility that stocks might be overpriced.

The market could be experiencing the summer doldrums (July to Labor Day) when a lot of traders are on vacation and there is more volatility than normal because there is less liquidity in the market. Time will tell.

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The National Bureau of Economic Research (NBER) announced the pandemic recession officially ended in April 2020. The NBER, who has the responsibility to gauge U.S recession and expansion dates, announced that last year’s recession started in February 2020 and ended in April 2020. By only lasting two months the 2020 recession will go on record as the shortest but deepest recession since WWII.

The economy seems to be in pretty good shape overall. The negative is that even though housing starts (concrete footers poured) are up, the ever-important housing permits are down showing a possible slowing of construction in the next few months. The positive is that corporate earnings reporting has been really strong so far and the economy is opening back up and Americans are spending a lot of money.  

In a nutshell, the stock market is stuck in a typical summer muddle and is still looking for a trend. A lot of investors feel like being more balanced in times like this when there seems to be no clear direction.

Keep an eye on the debt ceiling deadline on July 31st. If congress plays nice it shouldn’t affect stocks, but if they don’t play nice it could cause some volatility in the market.  Speaking of acting like a drunken sailor…………congress.

Have a blessed week!

All investment and financial opinions expressed are intended as educational material. Although best efforts are made to ensure the information is accurate and up-to-date, occasionally unintended errors and misprints may occur. Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., 7th Floor, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). Securities offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. PCIA and Private Client Services are separate entities and are not affiliated. Dr. Baker has attained his D.Min., the designation for Doctor of Ministry, and his AIF®, the designation for Accredited Investment Fiduciary®.

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