Market Burn-Off, Earnings Outlooks & What Wall Street Won’t Tell You

Burn-Off, Market Seasonality, Earnings & What Wall Street Won’t Tell You

The Money Wise guys start the show with a rapid-fire market update for the week just passed. The Dow was down 1.1%, the S&P 500 was down 2.3%, and the NASDAQ was down 2.8%. Though it was a down week, all three remain in the positive year-to-date, with the Dow up 5.8%, the S&P up 16.6%, and the NASDAQ up 32.9%. The Money Wise guys warned last week that market seasonality might hit hard in August, with it tending to be a weak month in any given market year – and we were definitely ripe for some pull-back and profit-taking. That’s just what we saw last week, with the market starting to burn off a bit of the over-bought condition, particularly in the S&P and the NASDAQ, and it could continue throughout August. The guys also discuss the earnings picture thus far and the common theme of companies reporting better-than-expected earnings with reasonable guidance but still not getting much of a bump up in price. They use Apple as an example in their discussion.

Market Seasonality

The guys mention market seasonality in this episode when they talk about August tending to be a weak month, so let’s dig into the concept a bit further. According to Brittanica Money, market seasonality refers to the tendency of financial markets to exhibit consistent patterns of demand and production over the calendar year. Weak Augusts are an example of market seasonality – sometimes also referred to as the summer doldrums – while other examples of market seasonality include the “Halloween Effect” and the “Santa Claus Rally.” Learn more about market seasonality from Investopedia here

In the second hour, the Money Wise guys pull back the curtain to share What Wall Street Won’t Tell You. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.