Weekly Stock Market Review

The Nasdaq Composite (and the Nasdaq 100) was the only one of the three major indexes to to not exceed the previous highs in July. The DOW was the strongest as investors flocked to the safety of the big Dow companies. The S&P 500 was also bullish as it has had a series of higher lows and higher highs. The Nasdaq has had the same series of higher lows but not higher highs. The stock market as a whole struggles when the Nasdaq in general and technology specifically.

Stock market sector analysis reveals the widespread weakness. The core of the technology group lost relative strength. Technology hardware lost 1.5%, semiconductors lost 2.3% and computer software lost the most at 2.8%. Without the big increase in strength by bio-technology the entire technology group would have had a much worse result for July. The biggest problem revealed in this report is the gigantic increase in the energy sector. It was up by as much as 9% last week before retreating to 6% now. Increases in the price of gasoline hurts the economy just as do tax increases. The continuing decline in strength of basic materials shows deflation – not inflation – as today’s overall difficulty. It has decreased for six straight months and for nine out of the last twelve.

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