Investors are hoping for an endless summer, as markets continued to rally in July.
Sentiment improved during the month as healthy economic data and strong earnings results helped support markets. The US also struck trade deals with various countries, adding to the optimism throughout the month. However, while investors took more of a risk-on stance in July, some uncertainty regarding the path of interest rates kept a lid on gains.
The Nasdaq 100 led the way higher, gaining 2.41% as large-cap tech companies reported better than expected earnings. The S&P 500, CRSP US Small Cap Index, and Dow Jones Industrial Average were also positive, with gains of 2.24%, 1.85%, and 0.16% respectively. As a whole, growth fared better than value as a style, with cyclical sectors outpacing more defensive sectors.
International stocks lagged their US counterparts, posting mixed data for the month. Emerging markets were able to advance 0.69% as the Chinese economy showed some signs of resilience. However, developed international stocks were slightly negative, losing 1.39% with the eurozone economy showing some signs of weakness.
While equities moved broadly higher in July, bonds experienced some headwinds. Aggregate US bonds fell 0.26% as the 10-year Treasury yield rose from 4.24% to 4.37%, pressuring bond prices. The Fed left rates unchanged for the fifth straight time in its late-July meeting, but Chairman Jerome Powell continued to signal a patient approach amid a stable economy and ongoing trade policy uncertainties. Investors are still pricing in between two and three rate cuts for the second half of the year, but the timeline can shift as more data becomes available.
Overall, July was a mostly positive month as sentiment improved and geopolitical noise was toned down. As markets have stabilized from the early-April selloff, it can be tempting to chase riskier asset classes higher. However, it’s important to maintain a patient investment approach with a plan that aligns your goals, time horizon, and risk tolerance. This can help to stay disciplined during both good and bad market environments.
As if booking flights wasn’t already a headache…
Delta announced its looking to move away from regular pricing in favor of a more dynamic AI system that determines how much each customer is willing to pay.
During the company’s earnings call, the President said they plan to have AI set 20% of ticket prices by year end.
A pilot program, which has used the system for 3% of fares, has already showed “amazingly favorable” results.
While other companies aren’t as open with their pricing policies, major airlines have already started to integrate AI for contacting passengers and dealing with cancelations.
Some worry this could lead to predatory pricing, but experts believe it will be difficult to tell much of a difference with the already wide spread of ticket costs.
Pharmaceutical companies are looking for more space.
Varda, a startup created to experiment with manufacturing medicine in low-earth orbit, is looking to expand its operations after a recent round of funding.
So far, the company has been able to complete three space launches, with a fourth currently in orbit.
The cycle takes approximately a month from start to finish and includes launching materials in a spacecraft, manufacturing in orbit, and returning a product to earth.
Why bother doing this in space? There are certain medications that can only become more refined in a low-gravity environment.
It’s still early, but startups are looking to prove that space isn’t only for Katy Perry, with larger companies looking to jump on the trend as well.
Broad Market Returns
| Asset Class | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | 2.29% | 14.34% | 8.54% | 16.35% |
| NASDAQ (QQQ) | 2.42% | 18.97% | 10.81% | 20.62% |
| Large Cap Growth (VUG) | 3.83% | 20.46% | 11.17% | 24.62% |
| Large Cap Value (VTV) | 0.17% | 6.93% | 5.76% | 7.76% |
| Small Cap Growth (VBK) | 1.97% | 14.06% | 1.14% | 8.60% |
| Small Cap Value (VBR) | 1.67% | 10.68% | 1.17% | 2.15% |
| Developed International (VEA) | -1.39% | 7.18% | 19.05% | 13.77% |
| Emerging Markets (VWO) | 0.69% | 10.37% | 13.52% | 15.97% |
| REITs (VNQ) | 0.09% | 1.91% | 2.09% | 2.45% |
| Aggregate Bonds (BND) | -0.27% | 0.57% | 3.77% | 3.39% |
| Corporate Bonds (VCIT) | 0.10% | 2.30% | 5.40% | 5.91% |
| High Yield Bonds (JNK) | 0.16% | 4.03% | 4.93% | 8.02% |
| Long Term Treasuries (VGLT) | -0.91% | -1.44% | 2.30% | -2.83% |
| International Bonds (BNDX) | -0.11% | 0.23% | 1.89% | 3.84% |
Market Health Indicator
The Market Health Indicator (MHI) measures market health on a scale of 0 – 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.
Fun Facts
- The longest amount of time someone has spent holding their breath underwater is 24 minutes and 37 seconds.
- Don’t worry if you don’t feel like doing anything on August 10th… it’s National Lazy Day!
- In 18th-century England, pineapples were so rare and valuable that people rented them as table centerpieces for parties.
- The longest English word whose letters are in alphabetical order is Aegilops.
– The Aspire Wealth Team
Weekly Wake-Up
