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Stay Clam Amid Market Selloff: Buy These Index ETFs
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Wall Street was subdued last week. The S&P 500 inched down 0.04%, the Dow Jones lost 0.6% and the Nasdaq was off 0.2%. Following a period dominated by the “Magnificent Seven” mega-cap tech stocks — similar to the dotcom bubble — investors are now looking beyond the big techs. As a result, a market shift took place and weighed on the broader market (read: Time to Buy These 4 ETF Areas?).
What to Do Amid this Market Trend Shift?
Steve Sosnick, chief strategist at Interactive Brokers, offered a reassuring perspective during market sell-offs: “Breathe,” he told Yahoo Finance. Amid any market turbulence, investors typically have three choices—buy, sell, or hold. While these options are always available, Sosnick indicated that sometimes doing nothing can be a prudent decision.
Several financial experts echo a calming tone in their analyses:
Michael Gapen, Head of US Economics at BofA Global Research: In a recent note, Gapen assured investors that current asset market fluctuations are within normal historical ranges and do not raise any alarm, said in a note to investors. This is a kind of healthy correction in the market.
Julian Emanuel of Evercore ISI also indicated that stocks are still in a bull market despite the recent market movements. Kevin Gordon, Senior Investment Strategist at Charles Schwab, also believes that recent employment indicators do not hint at a recession.
Goldman Sachs’ Optimistic Forecast
Goldman Sachs, led by David Kostin, remains confident about the S&P 500’s performance, projecting it to reach 5,600 by the year-end. As noted by Goldman Sachs, sales and earnings estimates for 2024 and 2025 have remained stable and the S&P 500 has often turned around after a 5% pullback.
S&P 500 earnings are likely to record an increase of more than 11% in the second quarter, marking the highest year-over-year earnings growth rate reported by the index since Q4 of 2021, per the yahoo finance article. Many analysts thus view the latest correction as a healthy one. This is especially true given that the estimates for the upcoming years are too decent for the S&P 500.
A survey of 130 CEOs conducted from Jul 15 to Jul 29 revealed that 70% of them do not expect a recession in the next 12 months, a huge change from this time last year when 80% of respondents said they saw a "brief and shallow U.S. recession" in the next 12 to 18 months, the Yahoo Finance article quoted.
DataTrek co-founder Nicholas Colas listed corporate earnings as the reason why he's still bullish on the market despite the recent volatility, as quoted on Yahoo Finance. If these were not enough, the Fed is likely to cut rates in September due to cooling inflation. If this happens, Wall Street would receive another boost.
Against this backdrop, investors can buy S&P 500 exchange-traded funds (ETFs) as these are more diversified in nature than the tech-heavy Nasdaq-100. Many are worried about tech stocks’ overvaluation while some apprehend a delayed return-on-investments on their AI initiatives.
Index ETFs to Buy Now
SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) and SPDR Portfolio S&P 500 ETF (SPLG - Free Report) are a few ETFs that can be tapped in the current situation. These funds can be bought on the recent dip.
SPDR Dow Jones Industrial Average ETF (DIA - Free Report) is another option to play. The SPDR Dow Jones Industrial Average ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones Industrial Average. The fund has a Zacks Rank #1 (Strong Buy).
Small-Cap ETFs have recently staged a turnaround. iShares Russell 2000 ETF (IWM - Free Report) , although a bit volatile choice, can be played amid the current market scenario. The ETF IWM was up 4.3% last week (read: Time to Buy These 4 ETF Areas?).
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Stay Clam Amid Market Selloff: Buy These Index ETFs
Wall Street was subdued last week. The S&P 500 inched down 0.04%, the Dow Jones lost 0.6% and the Nasdaq was off 0.2%. Following a period dominated by the “Magnificent Seven” mega-cap tech stocks — similar to the dotcom bubble — investors are now looking beyond the big techs. As a result, a market shift took place and weighed on the broader market (read: Time to Buy These 4 ETF Areas?).
What to Do Amid this Market Trend Shift?
Steve Sosnick, chief strategist at Interactive Brokers, offered a reassuring perspective during market sell-offs: “Breathe,” he told Yahoo Finance. Amid any market turbulence, investors typically have three choices—buy, sell, or hold. While these options are always available, Sosnick indicated that sometimes doing nothing can be a prudent decision.
Several financial experts echo a calming tone in their analyses:
Michael Gapen, Head of US Economics at BofA Global Research: In a recent note, Gapen assured investors that current asset market fluctuations are within normal historical ranges and do not raise any alarm, said in a note to investors. This is a kind of healthy correction in the market.
Julian Emanuel of Evercore ISI also indicated that stocks are still in a bull market despite the recent market movements. Kevin Gordon, Senior Investment Strategist at Charles Schwab, also believes that recent employment indicators do not hint at a recession.
Goldman Sachs’ Optimistic Forecast
Goldman Sachs, led by David Kostin, remains confident about the S&P 500’s performance, projecting it to reach 5,600 by the year-end. As noted by Goldman Sachs, sales and earnings estimates for 2024 and 2025 have remained stable and the S&P 500 has often turned around after a 5% pullback.
S&P 500 earnings are likely to record an increase of more than 11% in the second quarter, marking the highest year-over-year earnings growth rate reported by the index since Q4 of 2021, per the yahoo finance article. Many analysts thus view the latest correction as a healthy one. This is especially true given that the estimates for the upcoming years are too decent for the S&P 500.
A survey of 130 CEOs conducted from Jul 15 to Jul 29 revealed that 70% of them do not expect a recession in the next 12 months, a huge change from this time last year when 80% of respondents said they saw a "brief and shallow U.S. recession" in the next 12 to 18 months, the Yahoo Finance article quoted.
DataTrek co-founder Nicholas Colas listed corporate earnings as the reason why he's still bullish on the market despite the recent volatility, as quoted on Yahoo Finance. If these were not enough, the Fed is likely to cut rates in September due to cooling inflation. If this happens, Wall Street would receive another boost.
Against this backdrop, investors can buy S&P 500 exchange-traded funds (ETFs) as these are more diversified in nature than the tech-heavy Nasdaq-100. Many are worried about tech stocks’ overvaluation while some apprehend a delayed return-on-investments on their AI initiatives.
Index ETFs to Buy Now
SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) and SPDR Portfolio S&P 500 ETF (SPLG - Free Report) are a few ETFs that can be tapped in the current situation. These funds can be bought on the recent dip.
SPDR Dow Jones Industrial Average ETF (DIA - Free Report) is another option to play. The SPDR Dow Jones Industrial Average ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones Industrial Average. The fund has a Zacks Rank #1 (Strong Buy).
Small-Cap ETFs have recently staged a turnaround. iShares Russell 2000 ETF (IWM - Free Report) , although a bit volatile choice, can be played amid the current market scenario. The ETF IWM was up 4.3% last week (read: Time to Buy These 4 ETF Areas?).