THE WEEK ON WALL STREET
Stocks were under pressure last week as investors appeared to rotate out of mega-cap tech stocks and into areas that may benefit from lower interest rates.
The S&P 500 Index fell 1.97 percent, while Nasdaq Composite Index declined 3.65 percent. The Dow Jones Industrial Average bucked the downward trend, up 0.72 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 1.48 percent for the week through Thursday’s close.
FACT OF THE WEEK
On July 25, 1992, the opening ceremonies of the Games of the XXV Olympiad are held in Barcelona, Spain. The Barcelona Olympics were the first ever in which professional athletes were allowed to participate, and the first Games since 1972 in which every member nation of the International Olympic Committee competed. In all, 169 countries fielded teams, the most in the history of the Olympics.
One of the most anticipated performances of the 1992 Games was that of the U.S. men’s basketball team, nicknamed “The Dream Team.” International stars Magic Johnson, Michael Jordan, Larry Bird and Charles Barkley competed alongside 11 other NBA All-Stars and Duke University standout Christian Laettner. The team schooled their competition, players who in many cases were just excited to be on the same court with them. Before the U.S. game against Angola, for instance, the Angolan players posed for pictures with their American competition and asked for autographs. For their part, the Americans were relaxed, confident and, following the lead of the gregarious Barkley, often joked with the press, their opponents and each other. The Dream Team won the gold easily, beating their opponents by an average of 44 points.
Another historic performance was made by Derartu Tulu of Ethiopia, winner of the 10,000 meters, who became the first black African woman ever to win an Olympic medal. Afterward, she shared a victory lap with white South African competitor Elana Meyer in recognition and celebration of South Africa’s recent abolishment of apartheid and as a symbolic gesture of African unity.
Other memorable moments from the Barcelona Games included American Jackie Joyner-Kersee’s second consecutive heptathlon victory; Carl Lewis’ third consecutive gold in the long jump; and host country Spain’s gold-medal performance in men’s soccer.
MARKET MINUTE
Dow Leads Again
The week began very differently than it ended. All three averages rallied over the first couple of days this week, with the Dow leading on both days. Fed Chair Powell indicated the Fed may not wait for inflation to reach its 2 percent target before considering a rate move, buoying the markets. Then, markets hit a speed bump as investors appeared to take profits and rotated away from mega-cap tech names. The selling broadened beyond tech-related names on Thursday as all but one of the S&P 500's 11 sectors fell. Early Friday morning, a global tech outage caused disruptions for businesses, governments, and financial institutions, contributing to the weekly decline. Despite its losses in the second part of the week, the Dow finished in the green.
Upbeat Economic Data
Although stocks were under pressure, some investors saw “green shoots” in a few economic reports. Housing starts rose 3 percent in June. Building permits also ticked higher during the month. Retail sales were unchanged in June, which was better than expected. Investors were encouraged that consumers were still spending despite ongoing inflation.
FINANCIAL STRATEGY OF THE WEEK
Summer’s here, and the time is right for vacations, outdoor activities, and fun. It’s also a good time to consider a few financial matters. Here are some questions to ask yourself mid-year.
- Are goals still the same this year? Has market volatility affected your goals? Note any changes since the first of the year that may warrant reviewing your goals.
- Is your credit score looking good? Double-check it for any red flags. This can be a good way to catch issues like identity theft early.
- Contributions on track? Consider increasing your contributions to any personal or workplace-sponsored savings plans if it suits your goals.
- Does scheduled spending still make sense? Look at any impacts you've felt due to market volatility. Do your plans for the rest of the year align with reality?
If these tips have you thinking, please feel free to reach out. I’m happy to discuss your financial picture at summertime or any time.