Is a Bounce Brewing?

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Our View

Last week's trading was the wildest we've seen in a long time. I haven't witnessed so many 50- to 100-point up and down moves in a single day since the COVID pandemic. I think this is a sign of the times and that this volatility will continue beyond the end of summer. I get the feeling that the markets could remain in flux right up to the election, but I also think there will be a good buying opportunity for another push higher.

Although tech stocks have seemingly fallen out of favor, something miraculous has happened: the Russell 2000 logged its third consecutive week of gains. It’s worth pointing out that the Nasdaq 100 has declined in three straight weeks. 

With 3M having its best day ever (+22%), the Dow jumped 654 points, or +1.6% on the day, and was up 0.70% for the week. The S&P 500 closed down 0.80% for the week, while the Nasdaq ended down 2.1% for the week and experienced its biggest daily drop since 2022 on Wednesday.

Remember, this Wednesday is the last trading day of July and also the second day of the Fed meeting, with a lot of talk about potential rate cuts before the September meeting. Additionally, there were significant earnings reports and important economic indicators, including the APD report and jobs number on Friday.