- Inflation was flat for the first time in 25 years in July.
- Twelve-month inflation is now at 8.5%, down from 9.1% the previous month.
- U.S. stocks have already started a rebound, but so far it’s uncertain how long it will last.
- Weekly and monthly top deals
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Significant events that may affect your portfolio
One of the main events this week is inflation. Wait, don’t sleep, we know this isn’t the first time you’ve heard about inflation lately, but this time for a different reason.
Data for July has just been released, and prices were largely flat in July. That’s right, for the first time in a while, with the release of new data, we don’t see new inflation records. There is no reason to launch champagne yet, and the 12-month figure is still at 8.5%, but a marked improvement from the previous month’s 9.1%.
Not only did prices remain stable throughout the month, but in many cases prices actually fell. Airfare, clothing and (shocking) gas prices all fell in July.
In fact, prices are falling for most of the travel industry. Airfare prices are down 8% this month, car rental costs are down nearly 10% and the average hotel price is down 2.7%. After hitting a high of $5 a gallon on average, gasoline prices fell sharply, falling nearly 20% to $4.01 as of Wednesday.
It wasn’t all good news, with grocery prices still up 1.3 per cent last month and restaurants and rents both up 0.7 per cent.
At the moment, we can’t draw too many conclusions from just one month. This could be just a brief respite from rising prices, or it could be a sign that the trend is starting to turn. For now, analysts will be watching upcoming economic data with interest to judge which scenario is most likely.
The fortunes of corporate America have turned a corner in the past few weeks, with the S&P 500 up nearly 15% since June 16. In many cases, better-than-expected economic data has come out, and earnings season has been a surprise for many analysts.
Overall, this has created some positive moves in U.S. stocks, but so far, it’s uncertain if this is the start of a new trend or a “bear market rally” that will soon reverse.
Inflation news will have a positive impact on sentiment, as it has been one of the top drivers of pessimism in recent months. On a more specific level, we are seeing price declines in some of the most important sectors of the economy, especially crude oil prices.
Given the widespread use of oil for everything from plastic to transportation, softening prices have the potential to have knock-on effects for the wider economy.
Employment data released last week was also popular, with 528,000 jobs added in July. The number was a surprise, with many analysts expecting fewer than 400,000 jobs to be added this month.
That doesn’t mean it’s going to be smooth sailing from here, but it gives hope that a turnaround in the market may be getting closer.
Top Topics of the Week from Q.ai
The U.S. market has been battered so far this year. Technology stocks in particular have been hit hard after two years of staggering performances. The drop was so sharp that we thought it went too far.
U.S. stocks account for nearly 60% of total global market capitalization, but in 2022, the S&P 500 will underperform many other global markets. This doesn’t necessarily make sense, but it also means it’s a situation that might work in your favor.
Because of this potential mispricing, we created the US Outperformance toolkit, which uses pair trading to go long in the US stock market and short in other developed countries. Short positions include countries such as France and the United Kingdom, which have outperformed the U.S. so far this year.
We use artificial intelligence to rebalance these positions weekly in search of the best risk-adjusted return potential. This is a limited-edition kit, and with America’s recent upturn, chances may not last long.
Top Trading Ideas
Here are some of the best ideas our AI system recommends for next week and next month.
Valhi Corporation (VHI) – Diversified holding company is ours Top Buys for Next Week Quality value is rated A, growth and low momentum volatility are rated B. As of the end of June, revenue was up 25.7% YoY.
Sidus Space Company (SIDU) – Aerospace and defense company Sidus Space is a Top shorts for next week Our AI rated them F in our Low Momentum Volatility and Quality Value factors. The stock has lost 72.81% over the past 12 months.
Tronox Holdings Limited (TROX) – Titanium products manufacturer Tronox Holdings is a Top Buys for the Next Month Earn a B in our Quality Value, Technical and Low Momentum Volatility factors. Earnings per share rose 9.77% over the past 12 months.
Game Station (GME) – Everyone’s favorite memes are ours Top shorts for next month Our AI rated it an F for Quality Value and Growth and a C for Low Momentum Volatility. Earnings per share fell 11.01% over the past 12 months.
our artificial intelligence Top ETF trades for the next month It is investing in oil and gas and retail, while shorting Asia Pacific and floating rate bonds. Popular purchases It’s the SPDR S&P Oil & Gas Equipment & Services ETF, the SPDR S&P Retail ETF, and the ProShares Ultra Bloomberg Crude Oil. top shorts It’s the Vanguard FTSE Pacific ETF and the iShares Floating Rate Bond ETF.
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