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The month that was:
July was a very unusual month. The Dow went up by about 4.4% and the S&P 500 went up by about 1%, but the Nasdaq went down by almost 1%. The biggest winners were small companies, as the Russell 2000 went up by about 10%, one of its best months in years.
It was also a month full of big news. On July 11th, the CPI report showed that prices actually went down a little from May to June, and inflation fell to 3%. On July 13th, there was an assassination attempt on former President Trump at a rally in Pennsylvania. On July 19th, a bad software update from the cybersecurity company CrowdStrike crashed millions of computers around the world, grounding flights and shutting down hospitals and banks. On July 21st, President Biden announced that he would not run for reelection, and Vice President Kamala Harris became the Democratic candidate.
The big change in the market this month is called sector rotation. Sector rotation is when investors sell stocks in one part of the market and use the money to buy stocks in another part. For the first half of the year, investors mostly bought giant tech companies like Nvidia. After the good inflation report, investors became more confident that the Fed would cut interest rates soon. Small companies usually borrow more money than big companies, so they benefit the most from lower interest rates. Investors started selling big tech stocks and buying small companies, banks, and industrials. That is why the Nasdaq went down while the Russell 2000 went up so much.
Sector rotation is another reason why it is important to own companies in many different sectors. When one part of the market is out of favor, another part may be doing well.
Buys and Sells -
Bought 25 NKE at $72.55
Sold 15 NKE at $75.33
On June 27th, Nike said that its sales would go down this year, and the stock fell about 20% the next day, its worst day ever. At the start of the month, I sold some of my older Nike shares. Later in the month, when the price was even lower, I bought more. Nike is still one of the most famous brands in the world, and I think it can recover under better management, but it may take time.
Bought 1 DT at $44.94
Sold 16 DT at $44.04
Dynatrace's stock didn't move much after I bought it in April. I added one share at the start of the month, but later I sold all of my shares for a small loss of about 4% to raise cash for my other buys.
Buys -
Bought 85 PFE at $30.70
In April, I sold Pfizer at $25.30. Since then, the stock has gone up, and Pfizer has been cutting costs. I decided to give Pfizer another chance and bought shares back. It still pays a dividend of more than 5%.
Bought 8 PII at $75.67
Polaris kept going down, so I added more shares at a lower price.
Bought 3 SWK at $79.93
I added a few more shares of SWK at a lower price.
Bought 2 HSY at $183.69
I added two more shares of Hershey.
Sells -
Sold 10 ADSK at $239.93
Autodesk was one of the first stocks I wrote about in my newsletter. I sold my shares at about $240, which is a good profit from the roughly $200 I paid for most of them. I used the money for this month's buys.
Sold 10 SNOW at $129.00
Snowflake makes software that helps companies store and analyze huge amounts of data. Its growth has been slowing down, and it is still not profitable. Earlier this year, its CEO stepped down. I sold my shares to move the money into more profitable companies.
Thanks for reading my newsletter!