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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of more than 16,000 subscribers striving to be better investors with an edge in the market.

Every weekend we publish “The Weekly Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

Grab your coffee and let’s dive in.

Market Talk

It was a tough week for both the Nasdaq and S&P 500 as the technology sector saw another large sell-off.

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🗨️ Chat rooms: Investors discussed the the huge moves from mega cap tech and the crypto sell-off. Members also dove into the number of jobs reports and shared their views on the overall economy.

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3 Stories Moving the Market

These are some of the biggest stories from the second half of the week that had an influence on market action.

Fed’s key inflation gauge rose 2.5% in June from a year ago, in line with expectations

In June, the Federal Reserve's key inflation gauge, the personal consumption expenditures (PCE) price index, showed a slight easing of inflation.

The PCE index increased 0.1% month-over-month and 2.5% from a year ago, matching estimates.

Core inflation, which excludes food and energy, rose 0.2% from May and 2.6% on the year, also in line with expectations. Policymakers focus on core inflation as a better measure of long-term trends due to the volatility of gas and grocery prices.

These figures, which are above the Fed's 2% target, support the possibility of a widely anticipated interest rate cut in September. 

Magnificent 7 stocks sell off and wipe out $1.7 trillion in market cap

The "Magnificent 7" stocks have collectively lost over $1.7 trillion in market capitalization in the past two weeks.

With a more than 10% decline since their peak on July 10, this marks their first correction since October 2023. On Wednesday alone, the group shed over $768 billion, their largest single-day drop in history.

This selloff was driven by underwhelming second-quarter earnings from Tesla and Alphabet.

Tesla reported a 40% profit drop, causing its stock to plummet 12.3%, its worst single-day performance this year. Alphabet's earnings beat expectations, but concerns over YouTube ad revenue and the timeline for AI investments led to investor dissatisfaction.

OpenAI announces a search engine called SearchGPT; Alphabet in trouble?

OpenAI has unveiled a prototype search engine called SearchGPT, designed to provide users with fast, timely answers and clear, relevant sources.

The company plans to integrate this tool, currently in testing with a small group of users, into its ChatGPT chatbot.

SearchGPT aims to offer a more natural, intuitive search experience, allowing users to ask follow-up questions as if in a conversation.

This development could challenge Google's dominance in search, as Alphabet investors have been concerned about OpenAI taking market share since the launch of ChatGPT in November 2022.

In Other News

In this section, we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• AbbVie Beats on Q2 Earnings & Sales, Ups '24 EPS View

• IBM shares jump on earnings and revenue beat

• Dexcom shares plummet over 40% after company misses on revenue, lowers guidance

• Chipotle earnings and revenue top estimates, restaurant traffic rises again

• Warner Bros. Discovery sues NBA to secure media rights awarded to Amazon

• ‘Deadpool & Wolverine’ is already breaking box office records, with more possible soon

• 3M Jumps Most in 36 Years as New CEO Boosts Profit Forecast

• Union Pacific profit grows 7% as the railroad continues to get more efficient under new CEO

• Short seller Andrew Left of Citron charged with fraud by prosecutors, SEC

• Here's What Key Metrics Tell Us About Waste Management Q2 Earnings

• American Airlines cuts annual profit forecast as sales strategy backfires

• Bristol Myers Squibb beats earnings estimates, raises outlook as drugmaker slashes costs

• NYCB posts bigger loss than expected on exposure to office real estate

IE+ Posts of the Week

We continue to push out more and more content every week to give investors that edge. Here are the posts Investor’s Edge+ subscribers received this week.

Edge Report

Mondays are for the investors. Every Monday morning we share exactly what we’re watching in the week ahead, how we’re positioning, and even share a sneak peek into our systems and models. This week we discussed the upcoming earnings reports, the important inflation report on the calendar and our belief that volatility was here to stay. See the latest full report here:

Earnings Recap

Every week during earnings season we share a recap of the quarterly reports from stocks that we cover. This week Edge+ subscribers received two reports to their inboxes. You can see this week’s earnings recaps here:

The Week Ahead

Earnings will take center stage once again as investors look to these major companies' guidance for a clearer understanding of the economic outlook. We also get major jobs report and the latest Fed interest rate decision.

Earnings Reports

Let the earnings season begin. Here is the list of names we will be covering next week:

• Monday 7/29: McDonald’s

• Tuesday 7/30: Microsoft, Procter & Gamble, Merck, AMD, American Tower, Starbucks, and PayPal

• Wednesday 7/31: Meta, Mastercard, Qualcomm, and VICI Properties

• Thursday 8/1: Apple, Amazon, Intel, MercadoLibre, Coinbase, Hershey, and Block

• Friday 8/2: ExxonMobil, Chevron, and Enbridge

Here is the full calendar of scheduled earnings releases:

Economic Reports

Next week is all about the jobs reports. With the Fed’s inflation metrics showing progress, focus now shifts towards the labor market. We get nonfarm payrolls, the unemployment rate, ADP employment, JOLTs job openings, and initial jobless claims, which will give us a clearer picture of the market.

On top of the labor data, the Fed will announce its latest rate hike decision, which should be uneventful, though investors will be listening closely to Powell’s speech afterwards for hints at a September cut.

We also get two housing reports and key manufacturing data this week.

Want more? Check out our other resources

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Thank you for reading this edition of the Weekly Wrap-Up. Have a great weekend!

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.