PUT IN WORK (8/5/2024)

The stock market continued its ferocious tumble last week, surprising investors in the second half. While the S&P 500 (SPY) fell 2%, the Nasdaq (QQQ) fell a much more significant 3%. While the first two days of the week spelled trouble for the future, Wednesday gave investors the idea that markets were set to turn back around and climb higher—unfortunately, that was not the case. All those recouped gains were lost on Thursday, and markets dropped beneath a previously held level by Friday.

Right now, investors are scared. The most recent Fed meeting wasn’t anything out of the ordinary, but the recent jobs report managed to bring investors’ fears to new heights—but that doesn’t have to be the case. Investors are suddenly worried about the sudden growth of the stock market and the sudden decline in employment. Perhaps it truly is time for the stock market to take a breather, but a 9% drop in just three weeks may indicate more than just a “breather.” Investors fail to realize that even though the jobs report came in weaker than expected, this isn’t necessarily bad news for the economy!

If we want to see a “soft landing,” a softer-than-expected jobs report may very well be what we want to see for the long term. Some investors are concerned with the possibility that this is too soft, implying that the Fed has waited too long to cut rates. Naturally, we don’t know if this is or isn’t the case, but we believe it’s much too soon to call it and send the market into a downward spiral fueled by fears of a recession. Most investors still hope for a September rate cut, but as always, it could come up earlier or even later than that, which, of course, will have repercussions on the market and the economy at large when that time comes.

In the meantime, investors still have their sights set on future earnings. This week, we will see reports from companies such as Palantir (PLTR), Uber (UBER), Airbnb (ABNB), Shopify (SHOP), and Unity (U). Investors are hoping to see some good numbers to eliminate at least some of the volatility we’ve seen thus far, but only time will tell.

(Nasdaq ETF (QQQ) price from August 2023 - 2024 — each candle is 1 week. Chart provided by tradingview.com.)

PORTFOLIO UPDATE

Our portfolio took some heavy hits alongside the rest of the market, with some stocks dropping double-digit percentages. One thing to (hopefully) look forward to, however, is SoundHound’s (SOUN) upcoming earnings report, which will take place on Thursday after hours. We plan to hold all currently owned stocks for the foreseeable future. As always, thank you for reading, and happy investing.