It’s not a markets picture that you see too often.
When 4 major categories of assets all trend upward in the same month, something unusual is taking place. Typically, at least one is down when the another one is up, but not this month. Even the big cryptocurrency rallied after enduring a terrible May and a weak June.
Ordinarily, you could probably say with some accuracy that when stocks rise, bonds got sold. You could say that gold rallied on inflation fears and bonds sold off as interest rates climbed — but bonds rallied in July as rates declined even though inflation fears seemed to take gold higher.
Sometimes it’s best not to come up with explanations. Sometimes the proposed explanations don’t make that much sense. You’re better off just examining the price charts, finding trend and identifying probable support and resistance levels. In that spirit, let’s give it a shot.
Here’s the daily price chart of the Standard and Poor’s 500:
The upward trend coming off the March, 2020 pandemic lows just keeps climbing higher and higher. The S&P 500 kicked off July at about 4360 and closed the month at 4395, nothing spectacular but it counts as up. If this continues, 2021 will count as an amazing year of gains. If.
Take a look at the daily price chart of the NASDAQ-100:
This is the index that reflects the movement of the major big tech and social media names. July started at just above 14600 and closed at 14959. Again, not spectacular, but better than staying the same or headed the other way.
The daily price chart of the benchmark Treasury bond index looks like this:
If you bought bonds at the beginning of July and sold them at the end, you made money. The iShares 20+ Treasury Bond ETF began at 144, blasted up to 152 by mid-month and closed out at 149.
Here’s the daily price chart of the benchmark gold ETF:
The SPDR Gold Shares move step by step alongside the price of gold. This month the price chart starts at 166 and ends up at 169. That’s a profitable July for those betting on inflation via the precious metal.
The daily price chart for Bitcoin looks like this:
After a devastating plunge from April to June, the most well-known cryptocurrency found its feet and climbed back upward in July. Bitcoin started at 34000 and finished the month at 40,131.
Every asset class up at the same time in a single month is different. It must have happened before but I can’t remember when, if it did. There must be a lot of money around looking for a home — any home — these days.
Not investment advice. Do your own research and always consult with a registered investment advisor before taking any action.