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Weekly Portfolio Update, August 7
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Weekly Portfolio Update, August 7

A shaky stock market, our first double, and some good quarterly reports

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John Rubino
Aug 07, 2023
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John Rubino's Substack
Weekly Portfolio Update, August 7
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Let’s start with last week’s macro news, which is that interest rates spiked and stock investors finally realized that 7% mortgages and 10% car loans are bad for corporate earnings, while 5% money market fund yields make stock dividends look pointlessly meager. The result, from CNBC’s weekly closing report:

S&P 500 and Nasdaq tumble for four straight days, notch worst weeks since March

The S&P 500 and Nasdaq Composite slumped Friday for a fourth straight session, and notched their worst weeks since March, as traders seemed to book profits following the latest corporate earnings releases and U.S. jobs data.

The S&P 500 shed 0.53% to finish at 4,478.03, while the Nasdaq Composite dipped 0.36% to settle at 13,909.24. The Dow Jones Industrial Average lost 150.27 points, or 0.43%, to end at 35,065.62.

All the major indexes reversed earlier gains during afternoon trading, and finished the week with losses. The Nasdaq and S&P dropped about 2.9% and 2.3%, respectively, to notch their worst weeks since March. The Dow edged down 1.1%.

“People this week seem more respectful of risk than they were before,” said Steve Sosnick, chief strategist at Interactive Brokers, adding that “lots of bears have been capitulating, which is often a sign that we’re closer to the end of a rally than the beginning.”

So be careful. Check out the historical charts in Until Something Breaks… and note how the stars have aligned for a 2000 or 2008-style selling panic. Somewhere out there is a bear market that will make us wish we’d mortgaged the house and used the proceeds to short the S&P 500 and Nasdaq. It’s getting closer, so if you’re curious about shorting, this is a reasonable time to scratch that itch.

On the bright side

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