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The month that was:
In the past month, the S&P 500 went down by about 2.2%, the Nasdaq went down by about 2.8%, and the Dow went down by about 1.4%. This was the third month in a row that all three indexes went down. It is the first time the S&P 500 and the Dow have lost money three months in a row since 2020.
On October 7th, Hamas attacked Israel, and a war started in the Middle East. Wars create uncertainty, and markets around the world became more volatile. At the same time, bond yields kept rising. On October 23rd, the yield on the 10-year Treasury note went above 5% for the first time since 2007. As I explained last month, rising yields make stocks less attractive.
On October 27th, the S&P 500 entered a correction. A correction is when the market goes down by 10% or more from its highest point. The S&P 500's highest point this year was on July 31st, and by October 27th it was down a little over 10%. A correction is smaller than a bear market, which I explained in June is a drop of 20% or more. Corrections are normal and happen fairly often, even during bull markets. They can be scary, but they are also a chance to buy high quality companies at better prices.
There was also some good news. Companies reported better than expected earnings for the third quarter, and S&P 500 earnings were expected to grow compared to last year for the first time in a year.
Another big story this month was weight loss drugs like Ozempic and Wegovy. These drugs help people feel full, so they eat less. Walmart said that people taking these drugs were buying slightly less food, and stocks of food and snack companies had their worst week since May of last year. Many experts think these worries are overdone, but they still affected companies like Hershey.
Buys -
Bought 1 ONON at $24.13
On Holding's price went down even more, so I added one more share.
Bought 1 ASML at $599.00
I added another share of ASML before its earnings report. On October 18th, ASML said that it received far fewer new orders than last quarter, and that it expects its sales next year to be about the same as this year. The stock went down after the report. Chip companies are being careful with their spending right now, but ASML has no real competitors for its most advanced machines, so I am holding it for the long term.
Bought 1 INTU at $481.68
Intuit makes TurboTax, QuickBooks, and Credit Karma. In my April newsletter, I wrote that INTU was one of the companies paying off for my strategy. Tech stocks went down in October, so I used the opportunity to add a share.
Buys and Sells -
Bought 3 PFE at $30.96
Sold 3 PFE at $32.73
Pfizer's stock had gone down about 37% this year because people are buying fewer Covid vaccines and treatments. I bought a few shares on October 13th. That evening, Pfizer lowered its forecast for the year by $9 billion and announced a plan to cut $3.5 billion in costs. The stock went down at first, but after Pfizer explained its plan to investors the next Monday, the stock went up about 4%. I sold my shares the next day for a profit of about 6%.
Bought 2 HSY at $191.59
Sold 2 HSY at $188.98
I tried buying Hershey again at a lower price. However, worries about weight loss drugs kept pushing food stocks down. Hershey's CEO said the drugs are not hurting its business yet, but I decided to wait until the situation is clearer, and I sold my shares for a small loss.
Bought 1 EL at $140.17
Sold 12 EL at $136.78
Bought 7 EL at $137.50
Estee Lauder's stock kept moving between $136 and $140 this month. I made a few trades as the price moved, and ended the month with a slightly smaller position than I started with.
Sells -
Sold 3 LHX at $176.50
I bought these shares last month at $172.97 and sold them for a small profit to raise cash for my other buys.
Thanks for reading my newsletter!