August 7, 2023, 9:40 pm EDT
Pullback and Catch Up
Nasdaq stocks were pulled back but Dow Jones stocks catch up with the rally.
As pointed out in our 07/20 article, this situation continued to drive the uneven rally. On the one hand, AAPL and TSLA began to show a slowdown in performance. On the other hand, BA, AMGN, and several other Dow Jones stocks kept up the strength. Our portfolio holdings in CAT that were bought in early June also presented their power in the past two months.
At this moment, earnings are relatively strong overall for Q2 2023. Inflation data is still on mild notes. Furthermore, job markets and unemployment rates are also optimistic.
Therefore, we believe the current index rotation is a healthy sign for the stock markets.
Wildcards are Russia-Ukraine war that we should always be cautious about its development. Otherwise, we will keep our eyes open to looking for emerging stocks.
Core sectors seem to be attractive. Technically, we are searching for stocks that made breakouts or emerged after consolidation bases.