Week Ending 09_06_2024 Stock Market Recap

The market’s belly ache seemed to resolve itself this week but not in the way investors or parents of toddlers like to see….. How so? TUNE IN TO FIND OUT!!!

Episode Transcript

(00:34):
Hello and welcome to
this week's edition of the Big Money Report. I'm your host,
David Boothe, President and Financial Advisor at BIG Investment
Services. That's B-I-G, Boothe Investment
Group. We're a full-service financial advisory based out of Dover, Delaware,
serving clients all across America. And you

(00:56):
can read all about us at abigplan.com. That's www.abigplan.com. I
like to put the show together once a week just to give you a recap of
the week behind and a peek at the week and weeks to
come. Trying to keep you up to speed with you and your money.
And we're glad you're with us today. It is Friday, September 6, 2024. Big

(01:19):
time shout out to Daniel who passed a big
time test and on his way to BIG and
we are looking forward to having you on board. Daniel, my friend. So looking
forward to that. And also want to take a quick moment to give
a heartfelt thanks to All of our clients in
Delaware, we were recipients of the winning

(01:40):
award for the Delaware Stars presented by the Delaware State
News in the financial planning category as the best in
Delaware. So thank you all so much for voting for us. It means a lot.
And you know, when you're going against big firms, national firms like Merrill
Lynch and Savant and stuff like that, it means a lot to come out on top.
So thank you all so much. Really means a lot to us. So

(02:00):
with that said, let's jump into the numbers. That's all the
good news. Now let's talk about the bad news. It was a lousy, lousy
week for the market. But, but
if you are a consistent listener to this show,
if you read our last quarterly newsletter, then this does
not come as a surprise to you, right? We've been talking about this. We have

(02:22):
been saying it. We've said last week. Looks like
it's going to roll over. It looks pretty toppy here. It's been going sideways. We
did say that the market could resolve itself by going sideways long enough, but
our best guess was that it would go lower. Well, here we are, lower. So,
it's not a surprise. It does lead to some other questions, which I'll want
to circle back around and talk about in a minute, but it shouldn't come as a surprise to
you the market is down a bit. So, Dow Jones down 2.9% this week.

(02:47):
So pretty ugly move there. The S&P 500 down 4.2% on
the week. The Nasdaq composite down 5.7% and
the small cap index down 5.7% also. So
pretty ugly week across the board. Volatility index. Up
49% this week, back up to 22.4%. Again,

(03:09):
we talked about that. I mentioned I expected to see the VIX pop back
up into the 20s. Here we are in the 20s, so
really no surprise there. Looking at long-term bonds, they
received some love this week. 3.1% on the
week for the TLT, still not up a whole lot
for the year, only up 0.7% for the year, but a lot of money running

(03:30):
to bonds this week as there is fear about the economy
and expectation that the Fed's going to be cutting rates maybe even more aggressively than
some have been anticipating. Not so sure about that just yet, but
the market is trying to price that in. And then when you take a look at the sectors, they
were all lousy, except for two. Utilities,
which were only down 0.4 percent, or as I

(03:53):
say, 0.5, and consumer staples, things like Procter& Gamble,
Clorox, Coca-Cola, etc. up 0.58% on
the week. Everything else was down between 2 and 7%. Technology
down 7.4% this week. Industrials down 4, materials
down 4, energy down 5.7. It was all down. Semiconductors

(04:15):
down 11.7% for the week. So
pretty ugly week except for the real defensive sectors. And I've got to tell you, These
areas are not attractive. I mean, utilities, staples,
I keep looking at the holdings in these sectors. There's nothing there
I want to buy. They're already expensive. They keep going a little higher. It
just looks like computer algorithmic trading to me. Computers are

(04:36):
going to where the defense is regardless of valuation. It
doesn't really excite me a whole heck of a lot. It doesn't excite me at all, actually. And
then we take a look at the metals. Gold down .28% this
week, and silver down 3.3. So what moved markets? Look,
I just think you've got people coming off vacation ready to sell, number one.
Number two, I think you've got algorithms that are paying attention to seasonality and

(04:57):
some other things, and they're ready to sell. I just think you've got people selling. And
I don't think the news this week really specifically warranted any
major selling, except for one piece of news. that didn't get talked
about on the financial news networks, but I do think it did contribute to
the opening this week. And that was Russia officially changing
their nuclear engagement protocols. Okay, so

(05:21):
Russia announced over last weekend that they are making
official changes to their nuclear policy, where it has been stated
that they will only use nukes when nukes are used against them. They
are officially changing that policy, and I think they're setting the stage, folks, to try
to draw things to a close in Ukraine one way or the other. So that's something
to keep in the back of your minds. I think the market maybe was

(05:42):
taking that into account when it opened up on Tuesday. But
then other economic data came out this week. I think the market is just looking for
excuses to sell. So with the job openings number, and it was weaker
than expected quite a bit. So there's much fewer jobs available
than there has been. for people to go get. There's still jobs available,
okay, but just not as many as there has been in the

(06:03):
last couple of years. And then we had the actual employment
number came out today, and it was a little weaker than
expected. The market was looking for 160-some thousand jobs, got 140, but
again, it was positive, right? It's not a negative number. There was
still a positive 140-some thousand jobs, and the
unemployment number actually ticked down one

(06:23):
10th of a percent. So it went from 4.3% last month
down to 4.2%. I actually thought the number was okay.
I thought it was a good number. I mean, it's kind of like what we want. We want to see this
economy cool. And we're seeing that cooling with that type
of activity. We look at some of the other economic data. We had
services numbers come out this week. Now we had manufacturing right

(06:44):
last week and the manufacturing number was lousy. And they've been lousy
for a while, but the services number was really strong. It scored
like a 55, which is really high. That's really good. And that
shows that the service economy is still strong and robust. We're
looking at GDP growth is still on track to be
over 2% for the quarter. So right now things

(07:05):
are still growing. They're just slowing down. And again,
I think that what you're seeing this week is probably just a lot of
market mechanics. kind of taking shape here between traders coming
off vacation, booking profits and algorithms kicking in
and moving money around. So again, no surprise to
us. We've been expecting it. I think it'll continue right through

(07:27):
October. Honestly, the technicals kind of point to things being soft
here over the next six to eight weeks. and I think that will probably
continue. It won't go down in a straight line. It'll probably bounce here and there, but
I think it'll be sloppy for the next few weeks for sure. So it
brings me back around to the point that I wanted to bring up. I had someone ask me this week, David,
you say the market's going to go down and the doggone thing goes down. You say the market's

(07:49):
going to go up and the market goes up. You're so accurate on this stuff. Why
don't you sell everything when you know the market's going to go down and then
buy it all back again after it takes a big hit? Well, first of
all, I appreciate that you feel that way about me, but I'm not prescient. I
do not have a crystal ball. I cannot see the future. I work
my butt off, and I really truly believe that I

(08:10):
employ, when I say employ, I'm talking about contracts, some outside
folks, some of the best folks in the world. And I really do mean that. I'm
really dealing with some of the best there are. Some folks are on CNBC, you'd
recognize them if you saw them. Other folks don't have time for television and
they are just some of the best there are. I don't know if there's anyone better, but
none of them, none of these folks, not a single one of them that

(08:30):
I consult with or whose work I follow, none of them are
right all the time. The one that I have the highest regard
for, I think probably is probably the best there is. I've
seen him wrong. He was wrong in 2022. He was late to
the drawdown in 2022. It happens. It happens. So
no one's got a lock on this stuff. Nobody is right all the time. I do

(08:52):
look for things to align. I like it
when there's agreement amongst people that are not just pontificating
their opinion, but are actually digging into the charts and
graphs and the numbers and seemingly to agree. but
nobody's got a lock on things. So when I say I think the market looks
exhausted and probably going to head lower, it doesn't mean it's going to happen. And

(09:13):
what we don't want to do, folks, is we don't want to trade here. And look,
every now and then we'll place a trade. What's a trade? A trade is something
you're looking to make money on in a short time period, right?
There's traders and there's investors. There's people that are wheeling and
dealing in the market, buying and selling, buying at 9.30 a.m. and
selling at 3.59 p.m., trying to make money. That's

(09:35):
not what we do here right now. There are times where we'll see
an opportunity and we'll jump on it and we'll
make good money very quickly and we'll sell it pretty quickly. Sometimes
it happens like when you're up 30, 40, 50% or 50, 60, 70% or whatever,
or even higher, a hundred, 200, 300% in a few months,
you don't just sit on that. You got to trim that back. You got to take some of that profit and

(09:57):
take advantage of that. But for the most part, when we're looking at buying
things in our models, We're looking for long-term results.
We're looking to buy things that we're believing we're going to be able to hang on
to for two, three, four, five years or longer. And
we are excited about the long-term prospects of
those things. And then what we do is we massage those

(10:20):
holdings as we move forward, right? We lean towards our
convictions. If the market looks rich, Looks
like it's exhausted. Looks like it's going to go down. I've got an
investment that we've done very well on, and maybe the story is changing a little bit. AKA,
a great example, Charles Schwab. We sold it two weeks ago,
and I think the market's looking exhausted, maybe going to head down. I want to raise some cash. I'm

(10:41):
looking to either trim from some big winners and just pull some of those profits out,
or maybe cut loose something that just hasn't been working. I don't have a whole lot of faith in
anymore. Maybe something's changed in the story. If the market does
fall, now we can take that cash, we can jump in, and we can
add to the names that we like, that we already own, or pick up some new names, and
just kind of, as I said, massage it, lean in, lean out. But

(11:02):
never go all in or all out, because that's a loser's game. That's
how you end up getting burned, right? You go all in or
all out, I should say, and some good news comes out over the weekend,
and the market's up hundreds of points, 3%, 4%, 5% on
a Monday. That just really kills your returns, right? So you
just don't do that. Right now, we are probably

(11:23):
more balanced than we've been in a long time. We've got about
40% out of the market in our moderate models between bonds and cash,
60% in the market. And we've done that across the board with all of our models.
So we've got a little extra cash, some money in bonds. We feel
it's going to be a dicey time between now and the election. I do think there is
risk. that soft landing doesn't happen,

(11:45):
that soft landing becomes recession. I've been saying that. I don't think it happens this
year. I think it can happen into 2025. So we're going to maintain the measured approach,
but we never go all in, all out. So even though it sounds like I've got a
crystal ball and I appreciate the fact that you listen and you pay such close attention
to what I'm saying, I don't have one. Okay. What we're just trying to
do there is be mindful of where we are at any given point in time. So

(12:07):
with that said, I'm going to wrap up for this week. There's not a lot
much more to talk about. Expect it to continue to be choppy. Hey,
we're good. We've got some cash on hand. We've got money in bonds. We'll look to do some buying.
And between now and next few minutes, you're thinking about your future long-term goals, all
the things you want to do with you and your money. Maybe we should take that big
trip, buy that second house, get that Airbnb, retire a

(12:27):
little early. You know what your goals are. Don't just think about them. Think big.
Think BIG. And I will talk to you
Thank you for listening to this week's edition of the Big Money Report with
your host, David Boothe, President and Financial Advisor at
BIG Investment Services. For more information on BIG and
how you can access their planning and investment management services, visit

(12:50):
them at abigplan.com. That's abigplan.com. Or
call them toll free at 866-946-PLAN. That's 866-946-7526. The
foregoing content reflects the opinions of David Boothe and Boothe Investment Group,
Inc. and is subject to change at any time without notice. There's no

(13:10):
guarantee that the statements, opinions, or forecasts provided herein will
prove to be correct. Content provided herein is for informational purposes only
and should not be used or construed as investment advice or a recommendation regarding
the purchase or sale of any security. All investing involves risk, including the
potential for loss of principal. There is no guarantee that any investment plan or