• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock S&P 500 Sets New Record Highs Because of Value, Not Growth
Stock

S&P 500 Sets New Record Highs Because of Value, Not Growth

by July 13, 2024
by July 13, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

It was a very interesting week indeed. All-time high records continued to fall on a daily basis, but the complexion of the market most definitely changed during the latter part of the week. First, I want to pull up an hourly RRG chart to track 10 key growth stocks, most of which have carried the overall S&P 500 higher throughout 2024:

This chart is tracking the relative rotation of these 10 growth stocks (vs. the benchmark S&P 500) over the last 20 periods, or roughly 3 days. Many of these stocks started their 3-day journey on the right side of this chart, which highlights tremendous relative strength at that time. But look where they finished on Friday. Not one of these 10 stocks finished in the leading quadrant. Not one. AAPL held up best, but TSLA, META, and COST tumbled to close out the week. That type of behavior among these growth juggernauts would likely send you to the conclusion that we had 3 really bad days in the market. Instead, look at how the S&P 500 performed over the past 3 days from this hourly chart:

So what happened? How did the S&P 500 hold up when its most-heavily-weighted stocks fell so quickly?

Rotation. Bullish rotation. This is what sustains bull markets. Even the biggest and best leaders fall from time to time. But does the money leave the stock market or does it simply rotate and drive prices higher elsewhere. Well, last week it was the latter. Let’s check out large-cap growth (IWF) and large-cap value (IWD) and then the 11 sectors on that same 20-period RRG chart:

IWF:IWD

Sectors

In this case, two pictures say two thousand words.

Could the relative performance of the IWF and IWD have shown more disparity over the past few days than they did? Growth was tossed out the window, while traders suddenly fell in love with value stocks. I believe the June CPI report was the primary trigger for this rotation. I viewed it as a “sell on news” for growth stocks after months of “buying on rumor”. I also view it as “warning shots fired” towards Fed Chief Powell and his band of hawks. This report was an absolute DAGGER for those Fed officials that believe we should remain on the current “higher rates for longer” bandwagon. Check out the latest chart on core inflation at the consumer level:

The 1-month and 12-month rate of change (ROC) have rapidly declined. I swear I think the Fed is looking at a different chart, or maybe someone needs to turn their computers right side up. They’ve made it clear that they want sustainability towards their 2% target level. It sure seems to me that monthly Core CPI is back in the normal range and has been moving sustainably towards 2% for at least the last year. Yet the Fed keeps waiting, even talking about the possibility of another hike. Personally, I’m sick of this Fed. As I said, warning shots have been fired over the past few weeks. The bond market is SCREAMING at the Fed to lower rates. And growth stocks have just had their second bout of significant selling. We’re teetering folks.

I’ve been steadfastly bullish throughout this secular bull market, suggesting to everyone to avoid all the noise about crashes and collapses. I am, however, growing worried about the Fed’s handling of monetary policy. There are already economic signals that are telling me the cracks in our economic foundation are growing and spreading and that hopes of a “soft landing” are dwindling. If this isn’t stopped SOON, it’ll be too late, and we could be staring at a SIGNIFICANT market meltdown in the weeks and months ahead.

On Saturday, July 27th at 10:00am ET, I will be hosting an extremely important event, “The Fed and The Presidential Election Cycle: Why the S&P 500 May Tumble”. This event is FREE, but you must register and capacity is limited. If you want to consider ways to protect your capital, then I am urging you to sign up EARLY. For more information and to register, CLICK HERE.

Happy trading!

Tom

You Might Also Like
  • Personalized Options Trading Strategies: Discover High-Yield Covered Calls and Spreads with the OptionsPlay Add-On
  • Week Ahead: NIFTY May See Sharp Moves; Volatility May Spike Over The Coming Days
  • Never Short a Dull Market; AI is Sexy, But Everyone Hates Oil
  • Bitcoin Slippage
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Week Ahead: NIFTY Stays Significantly Deviated From It’s Mean; Stay Vigilant At Higher Levels
next post
Possible gunfire breaks out at Trump rally in Pennsylvania

You may also like

Momentum vs. Price: Is the Stock Market Rally Over?

January 24, 2023

Unlock the Secrets of Five Candlestick Patterns

November 30, 2023

This Relative Strength Signal Can Provide Early Warning Signs

November 9, 2023

3 WAYS to Pinpoint When a Stocks Uptrend is Ending

December 10, 2024

Further Inversion of Yield Curve Pushes Out End Date for...

July 26, 2023

How You Can Reduce Risk and Improve Timing When Swing...

April 13, 2023

Pullbacks within Uptrends Create Opportunities

February 12, 2023

Lowering the Bar: Why Lowe’s Could Head South

January 24, 2025

MUST SEE Options Trade Ideas! DIS, AAPL, META, BA, LULU

December 24, 2024

Stock Indexes Continue Winning Streak: Growth Stocks Still In the...

November 9, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025
    • NBA star Russell Westbrook launches AI-enabled funeral planning startup

      May 7, 2025
    • Use This Multi-Timeframe MACD Signal for Precision Trades

      May 7, 2025
    • Judge allows lawsuit over Burger King’s Whopper ads to move forward

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,185 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,064)
    • Investing (538)
    • Stock (2,529)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against...

      May 7, 2025
    • NBA star Russell Westbrook launches AI-enabled funeral planning startup

      May 7, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,064)
    • Investing (538)
    • Stock (2,529)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    HUGE NEWS! New SharpCharts Workbench Updates...

    November 21, 2023

    GNG TV: S&P Rallies Back to...

    November 4, 2023

    Don’t Ignore This Unusual Event on...

    January 20, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here