Braxton WM Broker Gives Analysis On US Stocks with Longest Winning Streak in Two Years: Optimism Abounds for Traders

  • August 3, 2023
  • Grand News Network

US stocks surge with their longest monthly winning streak in two years, driven by falling inflation and resilient growth, offering traders ample opportunities for profit and a positive outlook for the market.

Braxton WM broker Alex Novak says US stocks have ignited a winning streak, recording their longest monthly run in two years, as market sentiment soars on the back of falling inflation and resilient economic growth. The S&P 500 surged 3.1% in July, marking its fifth consecutive monthly gain, an achievement not seen since the summer of 2021. Additionally, the tech-dominated Nasdaq Composite rose 0.2% on Monday, reaching an impressive 4% gain since the end of June. This sustained positive momentum is reinforcing investor confidence and creating an optimal environment for traders to explore profitable opportunities.

Diversification and Opportunities Beyond the “Magnificent Seven”

The recent market surge is more than just a result of a few dominant tech giants. As signs indicate that the US Federal Reserve is nearing the end of its cycle of rate increases without causing a recession, the opportunity for traders lies beyond the “magnificent seven” mega-cap groups. Alex Chaloff, Chief Investment Officer at Bernstein Private Wealth Management, believes that the true potential for gains lies in exploring the forgotten stocks in the S&P 500. Traders can benefit from carefully analyzing these under-the-radar stocks, potentially uncovering hidden gems that can significantly contribute to their portfolios.

Favorable Debt Market Conditions and Economic “Soft Landing”

One of the most encouraging aspects of the current market landscape is the optimism about an economic “soft landing.” The Federal Reserve’s recent rate hike, which brought the federal funds rate to a 22-year high, has raised some concerns. However, many economists expect this to be the last rate increase in the current cycle. The belief that the Fed will be able to bring down inflation without triggering a recession is reflected in the shrinking premium that risky corporate borrowers must pay to issue new debt. As the gap between yields on US junk bonds and equivalent Treasury notes tightens, traders can take advantage of this favorable debt market condition to make strategic investment choices.

European Stocks Follow Suit with Positive Gains

The positive sentiment extends to European stocks, with the continent-wide Stoxx 600 adding 1.9% for its second consecutive monthly gain. Encouragingly, the eurozone economy grew more than expected by 0.3% in the three months to July, following a stagnant previous quarter. Additionally, annual inflation in the 20-country currency bloc slowed to 5.3% in July. With European Central Bank President Christine Lagarde suggesting that the rate-rising cycle may be concluding, traders can explore potential opportunities in European markets as well.

Tech Sector Earnings and the Impact on Wall Street

This week, investors eagerly anticipate earnings reports from prominent US tech companies, including Apple and Amazon. These reports are essential for gaining valuable insights into the health of the tech sector and consumer spending trends, both of which have been instrumental in supporting the economy. Traders closely watching these earnings releases can use the information to make well-informed decisions about tech-related investments. Apple, being the market’s most valuable company, holds particular significance as a litmus test for consumer spending, a crucial factor in driving economic growth.

Conclusion:

The ongoing winning streak in the US stock market, fueled by falling inflation and resilient growth, has created an incredibly positive and optimistic environment for traders. The continuous gains in the S&P 500 and Nasdaq Composite offer ample opportunities for investors seeking to maximize their returns. By diversifying their portfolios beyond the “magnificent seven” and analyzing under-the-radar stocks, traders can uncover hidden gems that contribute significantly to their overall performance.

Furthermore, with favorable debt market conditions and optimism surrounding an economic “soft landing,” traders can make strategic investment choices to capitalize on the current market momentum. Additionally, European stocks are experiencing positive gains, providing further avenues for traders to explore.

As tech giants like Apple and Amazon release their earnings reports, traders gain invaluable insights to confidently navigate the high-flying tech sector. These reports serve as crucial indicators of consumer spending and economic health, driving informed investment decisions.

Overall, the current market climate presents an array of promising opportunities for traders willing to seize the moment and make the most of the broad-based market gains. With falling inflation, resilient growth, and potential economic stabilization, traders can approach the future with optimism and confidence in their investment strategies.

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