The last few days the stock market has been looking like me on roller skates, a little shaky. Let’s look at why that is.
Investors seem to be concerned about higher Covid numbers and the potential for more restrictions that could affect the companies they are investing in. There is a potential that as more cities and organizations require masks or proof of vaccination that customers may think “it’s not worth the hassle” and slow down their activities and spending.
Americans have more money in the bank than they’ve had in a while but they might be getting a little stingy with it. For some reason, Americans spent a lot less in July than in June and especially with online shopping.
The Commerce Department released its July Retail Sales on Tuesday, August 17th, and it were much lower than expected. They were down -1.1% but was expected to only be down -0.3%. In the economic world, that is a big difference.
There’s been a clear slowing down in spending in home improvement, vehicles, and travel spending. Don’t misunderstand me, consumer spending is still good, but it is slowing. This is only one report; however, it might be signaling a more general slowdown.
The companies reporting their earnings for the first half of the year are mostly doing great, over 80% of the top 500 are beating estimates, but it seems investors think the stock market prices are already “baked into the price.”
As an example, Home Depot (HD) reported their earnings on Tuesday, August 17th, and beat earnings and revenues but their stock price dropped -4.29% that same day. Walmart (WMT) reported earnings the same day and beat estimates but their stock price stayed flat. Investors seem hard to please these days.
When I was learning how to roller skate sometimes my wobbles turned into faceplants. The bigger than expected dip in Retail Sales is worth watching to see if it’s an off month or an early indication of something negative, but overall, I don’t see anything that makes this current market wobbliness look like the start of something bigger. The market is wobbling a little but I think it will skate ok the rest of the year, no cool tricks but will get around the rink.
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®.
