It was a positive month for most indexes thanks to some window dressing to close the month.
To do so is illegal of course but those doing so are rarely, if ever, caught.
Nevertheless, it was a nerve racking month for investors overall but the bottom line for now is the long 2015 trading range for major U.S. indexes continues.
Energy has been a large drag on many large cap equity indexes. Many knew energy stocks were weak but the weakness had a larger impact than most expected. Exxon and Chevron reported profits down 50% which impacted markets negatively.
But that wasn’t all that had a negative impact as the Employment Cost Index fell to only 0.2%, the worst wage growth in U.S. history. That in turn encapsulates the inescapable income inequality we read so much about.
Many on Wall Street acknowledge Fed policies among other things are to blame. Goldman Sachs honcho Lloyd Blankfein admits low interest rates have allowed people like him who have assets profited vs many of those on Main Street who don’t.
In addition, as we’ve been reporting the past few years, abundant corporate stock buybacks, financed by cheap interest rates, have made corporate earnings look better even if headline results don’t impress overall.
Meanwhile, commodity markets continue to telegraph deflation which the Fed doesn’t acknowledge.
Stocks opened higher for the most part but as the day wore on the rally fell apart.
Leading market sectors higher included: Small Caps (IWM), Biotech (IBB), Healthcare (XLV), REITs (IYR), Utilities (XLU), Homebuilders (ITB), Emerging Markets (EEM), EAFE (EFA), Europe (VGK) Germany (EWG), European Monetary Union (EZU), Japan (EWJ), India (EPI), Brazil (EWZ), South Korea (EWY), Mexico (EWW), Malaysia (EWM), Thailand (THD), Indonesia (IDX) Gold (GLD), Gold Stocks (GDX), Euro (FXE) , Corporate Investment Grade Bonds (LQD) and Treasury Bonds (TLT)
Leading market sectors lower included: Energy (XLE), Oil & Gas Exploration (XOP), Financials (XLF), Banks (KBE), Transports (IYT), Crude Oil (USO), Natural Gas (UNG) and Commodity Tracker (DBC).
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume was relatively light and breadth per the WSJ was positive. But one look at Money Flows (below) you’ll be struck by the divergence.
So a positive week overall yields another positive month for investors.
The only trouble is the trading range remains as we enter a typically low volume month of August.
Let’s see what happens.
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Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001. ETF Digest was named one of the most informative ETF websites in the 10th Annual Global ETF Awards.
Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com
|WTI Crude Futr||46.15||-0.97||-2.06 %||10:33|
|US Dollar||97.34||0.02||0.02 %||10:43|
|Brazil||1440.707||0.85 %||-12.29 %||-21.37 %|
|Russia||472.224||-0.01 %||-7.92 %||16.62 %|
|India||508.162||1.24 %||1.47 %||2.37 %|
|China||66.249||0.40 %||-10.93 %||0.32 %|