Summer Malaise, Market Rotation, Fed-Speak & Investor Psychology
The Money Wise guys are back at it again this week, and the show begins with a look back at last week’s numbers from Wall Street. The Dow was up 0.6%, the S&P 500 was down 0.3%, and the NASDAQ was down 1.9%. YTD the Dow is up 6.4%, the S&P is up 16.3%, and the NASDAQ is up 30.4%. Are we experiencing a so-called Summer Malaise? The Money Wise guys discuss what they’re seeing and why August is a weak month historically. They discuss why the NASDAQ seems most affected and where we’re seeing market rotation out of tech and into other areas. There seems to be buying interest in some parts of the market and selling interest in other areas. The Money Wise guys also dig into data points like the CPI and PPI, though there’s nothing in the stats that gave the bulls or the bears an ah-ha moment. In two weeks, there may be some more market-moving data and Fed-speak, confusing the market once again, and the guys discuss whether there may be another interest rate increase in September.
What is Market Rotation?
The Money Wise guys mention market rotation often, as in this episode, so let’s break down what it really means. Market rotation is, essentially, a response to larger economic cycles. As the economy expands, investors tend to move out of certain sectors and move into others. Market rotation is often driven by traders anticipating the next sectors for market growth, which is why it’s sometimes called “sector rotation.” If you’d like to learn more, you’ll find more market rotation discussions here and here.
In the second hour, the Money Wise guys engage in a discussion on Investor Psychology. 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.
