July 30, 2026: Iran continues to target U.S. assets and allies in the Middle East. Efforts by Trump to negotiate with Iran have been unsuccessful, and the conflict seems likely to persist for the foreseeable future. As a consequence, prices have risen significantly, with an increase of 6.2%, primarily driven by higher oil and gas prices. The economy is also showing signs of slowing as the Q2 GDP was considerably below expectations. While the labor market appears stable on the surface, real wages are declining, making it difficult to determine how many recently unemployed individuals are relying on gig work, like driving for Uber, rather than collecting unemployment benefits.
Minutes from the most recent Fed meeting indicate that most board members voted to hold rates steady, while three voted to raise rates to fight inflation. This indicates that markets are underestimating the inflationary effects of the ongoing conflict in Iran. It may also indicate that the Fed is looking only at the unemployment rate and not considering possible underlying factors in the labor market.
Given that U.S. stocks appear to be overextended and due for a correction, it is wise to keep some powder dry by putting some funds in a money market account such as BOXX. On the other hand, some are confident that the bull market will continue. For those interested in growth stocks, you may want to consider stocks such as: MCS, DELL, CYD, AMKR, VSXY, MDV, SPH, HRMY, DHLGY, SIG, COUR, TRV, KALU, ENVA, and OPBK. For growth and dividends, consider: BMA, PNGAY, SBLK, MDV, PTEN, ARLP, SPH, BIP, GGAL, HTHT, and VVES. Over the previous three months and from highest to lowest, the fastest-growing ETFs were: VHT, XLV, VLUE, RSPT, QQEW. Since none of these ETFs were in the chip sector, an obvious rotation has occurred. Also, for those considering which CEFs to buy, I’d take a look at: BSTZ, MLPI, TDAQ, ZTR, THQ, SPE, PFFA, BMEZ, IGA, RQI, BDJ, and VVR, for example. As always, good investing!
