Hope you are all doing well. The S&P 500 rose fractionally and the NASDAQ added around 1% for the week, offsetting the small declines that both indexes posted the previous week. The Dow was down fractionally for the second week in a row. Each of the major indexes remained within a few tenths of a percentage point below recent record highs. 97 year old social media influencer and proof you can still have fun in your nineties, Helen Van Winkel “baddiewinkle”, passed away this week. I have broken down this week’s update using some of her tweets.
“Can’t See The Haters” – Helen Van Winkel | https://x.com/baddiewinkle/status/465211531379347456
For months we have heard that the magnificent 7 stocks (Microsoft, Apple, Alphabet (Google), Meta (Facebook), Amazon, Tesla, Nvidia) are overvalued and due for a large correction. However, hating those stocks is a bad investment choice as they hit another high Friday morning. Here’s why you should stay invested in these stocks even if they experience any type of drop in the next couple weeks. These companies have demonstrated strong financial performance, excellent earnings, and strong balance sheets. This financial stability allows them to weather economic downturns more effectively than smaller firms. They are the market leaders in key trends such as AI, cloud computing, electric vehicles, and e-commerce. Furthermore, they have the capital to maintain their dominance in these areas by consistently investing heavily in research and development. Even if the blistering earnings growth of prior years moderates, they should continue to have stronger aggregate earnings and growth rates than the rest of the S&P 500 for the next several years.
“Forget Your Bad Vibes.” – Helen Van Winkel | https://x.com/baddiewinkle/status/463014085122985984
Bad news in the labor market is being brushed off by the markets because it increases the chance that the Federal Reserve will cut rates. The latest monthly jobs report released on Friday extended a recent run of weak labor market data. August’s gain of 22,000 jobs came in far below economists’ consensus expectations for around 75,000. The unemployment rate rose to 4.3%, the highest since 2021. Moreover, June’s job figure was adjusted downward to show a loss of 13,000 jobs. That makes it the first monthly decline since 2020.
“Wiping The Tears Away” – Helen Van Winkle | https://x.com/baddiewinkle/status/490301452930121730
Those needing mortgages were able to wipe away some tears this week. Mortgage rates finally fell in a meaningful manner. The average 30-year mortgage rate fell sharply following Friday morning’s weaker-than-expected jobs report. The drop from an average 6.45% on Thursday to 6.29% on Friday marked the largest one-day decline since August 2024. Over the past four months have gone down more than three quarters of a percent.
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