Our July 2023 stock and ETF watchlist with entry points, sector analysis, and market outlook.
Market Overview
Welcome back to The Wealth Catchers' watchlist. The month of June provided a lot of excitement for us as investors with all the indices in the green. We have officially entered what most are saying is a new bull market (having rallied 20% from the lows). Now, this depends on what camp you are in when defining a bull market. Is that rallying 20% from the lows or blowing past the all-time highs? Personally, I view a bull market as one that's within range of setting new highs; at this point in time, we are still a long way from that. Obviously, I'm not taking anything from this rally; it's been a great one, seeing all these breakouts and new 52-week highs.. As mentioned in the June watchlist, we know that this rally has been carried by a few companies. I'm sure you've seen it dubbed "The Magnificent Seven" across many platforms. This again highlights how concentrated this rally is, even though some would argue that this shouldn't add to any worries. My cautious bias still remains. I would like to see another sector or two get involved in this rally so that it's more spread out and not holding on to this "Magnificent Seven," which happens to be mainly tech. Something to keep in mind during this rally is to look at which indices are lagging overall as well. The Dow Jones and Russell 2000 are only up 3.84% YTD and 7.88% YTD, respectively. That's where you could potentially find some opportunity if you feel like you're missing out on this rally and expect the laggards to catch up. Also, in case you're wondering, these are the "Magnificent Seven": Apple, Microsoft, NVIDIA, Amazon, Meta, Tesla, and Alphabet. If you have been with me for a while, you know that I've had 5 out of 7 of these names on the watchlists since November 2021. I guess I should have given them a fancy name, something like "The Starting Five."
Fed & Monetary Policy
In other news, the Fed "skipped" rate hikes this past meeting. Skip is the term that seems to be the most fitting for this; the Fed is avoiding the word "pause" in order to keep investors and the economy aware of their expectations. The skip is in place in order to give the Fed more time to see the effects of these aggressive rate hikes and give them enough data to decide their next move. The Fed does seem steadfast in holding its position of having two more rate hikes this year. The percentage is unknown, but it is safe to say that it'll most likely be 25 basis points per hike at those two meetings. Anything above that would not be in line with the precedent they have set and could spook the market. As for the global markets, they are still raising rates, so that does muddy up the picture a bit. As for cuts, we can throw that out the window as the Fed is not committing to cutting rates this year or next.Also, some of our favorite names in the market and on the watchlist have hit all-time highs in the month of June. They're listed below:Microsoft; All-time high: $351.47Apple; All-time high: $194.48Nvidia; All-time high: $439.90Mcdonald's; All-time high: $299.10At the close of month here are how the indices performed:Dow Jones (4.07%)S&P 500 (5.43%)NASDAQ (5.24%)Russell 2000 (6.83%)At the close of the month of June the VIX was at 13.59. At the close of the month the "Fear and Greed" index was at 80 indicating extreme greed in the market.
Index Performance
| Index | Performance |
|---|---|
| Dow Jones (Jun 2023) | +4.07% |
| S&P 500 (Jun 2023) | +5.43% |
| NASDAQ (Jun 2023) | +5.24% |
| Russell 2000 (Jun 2023) | +6.83% |
| VIX | 13.59 |
Top Sectors
Bottom Sectors
Stock Entry Points
| Ticker | Daily Entry | Weekly Entry |
|---|---|---|
| AAPL | $155–$167 | $135–$157 |
| MSFT | $268–$295 | $243–$284 |
| NVDA | $225–$297 | $141–$224 |
| AMZN | $105–$110 | $102–$109 |
| GOOGL | $102–$109 | $92–$105 |
| META | $225–$297 | $176–$224 |
| TSLA | $195–$212 | $153–$188 |
| MCD | $273–$282 | $260–$271 |
| NKE | $104 | $104–$110 |
| ABNB | $111–$119 | $105–$112 |
| SBUX | $97–$100 | $72–$95 |
| WMT | $142–$148 | $129–$142 |
| WM | $161 | $149–$159 |
| V | $216–$227 | $197–$208 |
| PG | $137–$144 | $124–$138 |
| COST | $495–$501 | $503 |
| SHOP | $43–$53 | $43–$57 |
| ADBE | $355–$385 | $324–$432 |
| CRWD | $124–$134 | $101–$129 |
| IIPR | $69–$73 | $67 |
| JPM | $129–$137 | $127–$131 |
| NEE | $70–$76 | $69–$75 |
| LLY | $357–$386 | $299–$361 |
| TMO | $506–$522 | $478–$550 |
| ADP | $212–$231 | $195–$225 |
| SHW | $207–$234 | $205–$240 |
| RTX | $96 | $83–$94 |
ETF Entry Points
| Ticker | Daily Entry | Weekly Entry |
|---|---|---|
| VUG | $238–$252 | $223–$261 |
| VGT | $359–$387 | $341–$361 |
| VOO | $368–$379 | $352–$370 |
| SMH | $118–$131 | $96–$125 |
Key Takeaways
- →June 2023: Magnificent Seven dominated with multiple ATHs; Fed paused rate hikes.
- →New additions: JPM, NEE, LLY, TMO, ADP, SHW, RTX — diversifying beyond pure tech.
- →Fed first pause since March 2022; signaled 2 more hikes possible in 2023.
- →Russell 2000 +7.88% YTD vs. NASDAQ — watch for broadening market participation.
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