Wall Street expects this latest rally to be short-lived.
| DOW | | NAME | LAST | CHG | %CHG | | AAPL | 161.51 | -1.00 | -0.62% | | INTC | 36.96 | +0.65 | +1.79% | | MSFT | 278.01 | -2.73 | -0.97% | |
| | S&P 500 | | NAME | LAST | CHG | %CHG | | F | 15.34 | +0.65 | +4.42% | | AMD | 96.78 | +2.31 | +2.45% | | AMZN | 135.39 | +0.44 | +0.33% | |
| | NASDAQ | | NAME | LAST | CHG | %CHG | | AMD | 96.78 | +2.31 | +2.45% | | AMZN | 135.39 | +0.44 | +0.33% | | AAPL | 161.51 | -1.00 | -0.62% | |
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Stocks slumped on Monday, the first trading day of August, as investors turned cautious following July's rally. All three major averages fell, snapping three-day winning streaks as investors continued to weigh signs that the economy is slowing and could be in a recession. A better-than-expected reading of the July manufacturing index from the Institute for Supply Management lifted stocks early in the session. Following the report, the Atlanta Federal Reserve's GDPNow real-time tracker estimated third-quarter gross domestic product rising by 1.3%, lower than the 2.1% forecasted last week. It's an early sign that the economic outlook for the quarter is bleak. Falling oil prices weighed on energy stocks. West Texas Intermediate oil futures settled at $93.89. The sector was the day's biggest laggard and could be another sign of a rough month to come. The commodity could fall even further to $85, according to Mark Newton, Fundstrat global head of technical strategy. That means it's not a place to hide in August, he said. |
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The Energy Select Sector SPDR Fund ETF, which represents the S&P energy industry, shed more than 2% on Monday. Multiple Wall Street strategists agreed that the July rally will likely be short-lived. The more than 9% jump in the S&P 500 last month was the best monthly performance of the index since November 2020 and the best July since the Great Depression, Bank of America's Savita Subramanian wrote in a Monday note. Still, the firm thinks the July gains are a bear market rally. "We view this as a bear market rally, which is common, occurring 1.5 times on avg. per bear market since 1929," Subramanian said. Mike Wilson of Morgan Stanley agreed, telling investors to take advantage of the market rally while it lasts. He said that the window in which stocks are working will soon close. "Risk reward is poor after the recent rally so trade accordingly as time may be running out," he added. |
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