{"id":11440,"date":"2023-08-13T13:14:38","date_gmt":"2023-08-13T13:14:38","guid":{"rendered":"https:\/\/isafespend.com\/investing\/the-stock-market-had-another-tough-week-its-august\/"},"modified":"2023-08-13T13:14:39","modified_gmt":"2023-08-13T13:14:39","slug":"the-stock-market-had-another-tough-week-its-august","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=11440","title":{"rendered":"The Stock Market Had Another Tough Week. It\u2019s August."},"content":{"rendered":"
\n
\n

<\/p>\n

\n
<\/div>
\n

This past week was full of false breakouts and aborted breakdowns, ultimately creating a lot of noise without providing much information.<\/h4>\n


\n Angela Weiss\/AFP\/Getty Images
\n <\/span>
\n <\/figcaption><\/figure>\n<\/p><\/div>\n

August is living up to its reputation as a tough month for stocks\u2014but it might also be setting investors up for the next opportunity. <\/p>\n

It was a yawner of a week\u2014as long as you didn\u2019t look at the
\n Nasdaq Composite.<\/span>
\n The
\n S&P 500 index
\n fell 0.3% while the
\n Dow Jones Industrial Average
\n eked out a gain of 0.6%, but they mask the volatility under the surface that was clearly visible in the tech-heavy Nasdaq, which dropped 1.9%. It\u2019s now down nearly 4.9% in August. <\/p>\n

\n

There was plenty to fret about, including bank credit downgrades by Moody\u2019s and the likely path of the Federal Reserve\u2019s interest-rate hikes in light of consumer and producer inflation readings that clearly show that the easy part of disinflation is over. Besides, a bull market that had been led by just seven stocks, including
\n Apple
\n (ticker: AAPL),
\n Microsoft
\n (MSFT), and
\n Nvidia
\n (NVDA), can\u2019t go on forever.<\/p>\n

\u201c[It\u2019s an] appropriate pause by the market,\u201d David Donabedian, chief investment officer at CIBC Private Wealth US, told Barron\u2019s, <\/em>making a distinction with the rally led by a handful of tech names earlier this year. \u201cWe\u2019re now seeing a healthy market.\u201d<\/p>\n

If a choppy one. This past week was full of false breakouts and aborted breakdowns, ultimately creating a lot of noise without providing much information, particularly with trading volume low in August. But it was required if the stock market were going to be able to continue higher. \u201cA lot of people are in a wait-and-see mode,\u201d says CappThesis founder and market technician Frank Cappelleri. \u201cThis was needed to see more constructive bullish patterns form.\u201d <\/p>\n

It might take a while to get to that point, and investors should use this holding pattern as an opportunity to do some pruning of stocks that have run up while adding to sectors that had been less loved. Healthcare and utilities come to mind. While the
\n Technology Select Sector SPDR
\n exchange-traded fund (XLK) has gained 34% this year, the
\n Health Care Select Sector SPDR
\n ETF (XLV) is roughly flat, and the
\n Utilities Select Sector SPDR
\n ETF (XLU) has fallen 8.4%.<\/p>\n

And those sectors could come in handy if the unexpected happens. Even though many on Wall Street are dismissing the likelihood of a recession, it is still a time to exercise some caution. The Fed, after all, has raised interest rates by 5.5 percentage points since March 2022, and the effects of those hikes take time to be felt by the market. The yield curve, a reliable indicator of recessions, remains deeply inverted. While the \u201cR\u201d word is scary, it does bring opportunity. \u201cRecession is an ominous term, but it typically clears the deck for a durable multiyear bull market,\u201d says Donabedian.<\/p>\n

If we\u2019re not in one already.<\/p>\n

\n

<\/p>\n

\n
\n \"\"\n <\/div>
\n <\/figcaption><\/figure>\n<\/p><\/div>\n

Write to <\/strong>Carleton English at carleton.english@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This past week was full of false breakouts and aborted breakdowns, ultimately creating a lot of noise without providing much information. Angela Weiss\/AFP\/Getty Images August is living up to its reputation as a tough month for stocks\u2014but it might also be setting investors up for the next opportunity. It was a yawner of a week\u2014as<\/p>\n","protected":false},"author":1,"featured_media":11441,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-11440","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nThe Stock Market Had Another Tough Week. It\u2019s August. | iSafeSpend<\/title>\n<meta name=\"description\" content=\"This past week was full of false breakouts and aborted breakdowns, ultimately creating a lot of noise without providing much information. 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