Market Update: Late Summer Floating

I'll keep things short this week...

I'm not particularly concerned about last week's market selloff. We saw the indexes top out at midweek, then slide about 2% lower. The market could easily slide even lower this week.

Yet the indexes' rise in the last few months is such that all this "bouncing around" may get our hearts going pitter-patter for a few days. But I really wouldn't start paying attention unless or until they break the trendline I've drawn on the chart below:

As I keep saying, the stock market has a tendency (though not always) to "float" higher during the summer.

• Trading volumes are generally lower during this time of year.
• Many of us are traveling and not really focused on the market anyway.
• Many of us pay less attention to the news, as well. So whatever urgent problems are out there - we'll worry about them "later."

Lastly, summer is marked in the beginning, middle and end by major holidays - Memorial Day, 4th of July, and Labor Day.

Given how the stock market tends to behave positively in the leadup to most major holidays (though again, not always), that leaves plenty of time for stocks to drift along without a lot of killjoy bad news ruining the vibe.

So that's why I say I wouldn't get too concerned about a selloff right now, based on day to day news. It's almost to be expected, and helps set the stage for another effervescent rise.

For example, this Wednesday we'll see the next release of the US Consumer Price Index (CPI). Expectations about the monthly CPI data have been on the downslope for months now.

But even if the CPI data surprises everyone and ticks higher (instead of lower), any extension of last week's selloff could still be temporary.

Just keep in mind that most of the major tech stock winners of the past few months - are all reporting quarterly earnings over the next 3-4 weeks:

• Meta (META): July 26
• Amazon (AMZN): July 27
• Apple (AAPL): August 3
• Google (GOOG): July 25
• Tesla (TSLA): July 19
• Nvidia (NVDA): August 23
• Microsoft (MSFT): July 27

My point is...it's late summer. The stock market is "floaty"...and there are still plenty of events ahead of us to keep it "floaty" for the next month.

Best of goodBUYs,

Jeff Yastine