If markets were hoping for a summer vacation, July had other plans.
Investors faced a mixed bag of signals, with ongoing geopolitical uncertainty and inconsistent economic data keeping sentiment in check. The labor market added fewer jobs than expected, though the unemployment rate ticked lower. Inflation came in below expectations, but remained somewhat elevated with higher oil prices continuing to add pressure. Altogether, the data gave investors plenty to digest, but little clear direction.
US markets reflected this uncertainty, with performance varying by style. Tech stocks pulled back sharply, with the Nasdaq 100 falling 6.59%. The CRSP US Small Cap Index also slipped 2.61%. However, the S&P 500 ended the month roughly flat, dipping just 0.06%, while the Dow Jones Industrial Average managed a slight gain of 0.38%. Value outpaced growth as a style for the month, as more defensive, non-tech sectors provided some support.
International markets also traded lower, with declines largely inline with what was experienced in US markets. Developed international stocks fell 0.88%, while emerging markets slipped 1.57%, as many of the same geopolitical and economic questions weighed on markets overseas.
Bonds had a difficult month as interest rate volatility picked up. Aggregate US bonds declined 1.30%, with the 10-year Treasury yield climbing sharply from 4.44% to 4.75%. Renewed inflation worries, driven in part by rising oil prices, pushed yields higher and pressured bond prices. The Fed held rates steady at its July meeting, but markets are now pricing in a 66% probability of a rate hike at the September meeting, a notable shift from the rate-cut expectations that dominated the conversation earlier in the year.
July served as a reminder that market conditions can turn quickly, and that “risk-on” and “risk-off” can coexist across different areas of the market. With rate expectations in flux and economic data sending mixed signals, it’s important to remain grounded in a long-term financial plan rather than reacting to headlines. A well-diversified portfolio, aligned with your goals and risk tolerance, remains the best tool for navigating whatever comes next.
Apparently college students aren’t the only ones using AI to pass their tests.
OpenAI disclosed that two of its models broke out of a supposedly airtight testing environment and hacked into fellow AI company Hugging Face.
The OpenAI models were being evaluated on a cybersecurity test. However, rather than solving the problem themselves, they broke into Hugging Face’s systems to steal the answers.
For the test, OpenAI dialed back the safety guardrails that normally stop its models from writing exploit code. Paired with an unknown vulnerability in an internal software tool, it gave the models an opening to reach the open internet.
Both companies teamed up to investigate, with OpenAI disclosing the underlying vulnerability so it could be quickly patched.
At least we can all rest easy knowing that AI models definitely won’t try that again…
Netflix built its platform on binge-watching, but viewers seem to be losing their appetite.
A number of popular series have seen dramatic viewing declines for their second seasons.
Sophomore slumps can be normal for TV, but long gaps between seasons and difficulty keeping shows relevant have amplified viewership drops.
In response, Netflix is reportedly exploring a new direction… Live television.
Executives are weighing the addition of live, genre-based channels that run shows and movies on a continuous loop, along with bundling deals with other streaming services.
This would open the door to more ad revenue, which is an area Netflix has been leaning into in recent years.
And Netflix said it would never turn into its parents…
Broad Market Returns
| Asset Class | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | -0.02% | 4.25% | 10.16% | 19.58% |
| NASDAQ (QQQ) | -6.57% | 3.15% | 12.26% | 22.35% |
| Large Cap Growth (VUG) | -1.09% | 2.55% | 5.02% | 12.79% |
| Large Cap Value (VTV) | 0.93% | 6.89% | 16.37% | 26.83% |
| Small Cap Growth (VBK) | -6.90% | 1.75% | 12.94% | 21.15% |
| Small Cap Value (VBR) | 0.67% | 5.73% | 16.70% | 25.82% |
| Developed International (VEA) | -0.88% | 3.19% | 13.83% | 29.25% |
| Emerging Markets (VWO) | -1.57% | -0.19% | 9.41% | 21.06% |
| REITs (VNQ) | 2.61% | 3.63% | 14.01% | 15.30% |
| Aggregate Bonds (BND) | -1.28% | -0.74% | -0.54% | 2.63% |
| Corporate Bonds (VCIT) | -1.29% | -0.73% | -0.64% | 3.07% |
| High Yield Bonds (JNK) | -0.17% | 0.45% | 1.73% | 5.44% |
| Long Term Treasuries (VGLT) | -4.01% | -2.54% | -3.26% | -0.38% |
| International Bonds (BNDX) | -1.14% | 0.12% | 0.22% | 1.19% |
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
- When you look up the word “askew” on Google, it triggers a feature that tilts your screen a little bit.
- If every human on Earth entered a rock-paper-scissors tournament, the winner would only need 33 wins in a row to become the global champion.
- Clouds don’t actually turn dark before it rains. They just look darker because the water density prevents sunlight from reaching the bottom.
- The most expensive book ever sold is the Codex Leicester by Leonardo da Vinci, which was purchased for $30.8 million in 1994.
– The Aspire Wealth Team
