The U.S. stock market’s four-week winning streak came to an end last week with all major indexes wearing red. The Nasdaq, where the gains have been the most robust, fell the most—dropping more than two-and-a-half percent for the week, while the S&P 500 fell a little over 1%. Futures to start off this week are looking red too. Volatility, which had been taking a long summer snooze, woke up, and it was kind of hungry as the VIX, or volatility index, broke back above 20 for the first time in several weeks. The expiration of $2 trillion in options last Friday—obligations to either rollover existing bets that the markets will rise or fall in the near-term future—added to the volatility, and given the selloff, it looks like a lot of options traders pulled their calls—bets that the market will rise in the near-term—off the table.
Short sellers were back in late summer style too, as a basket of some of the most highly-shorted stocks tracked by Bloomberg fell 6% for the week, the best week for short sellers since March of 2020. They, apparently, don’t think that summer is over yet. Among the most shorted stocks in the market, according to S3 partners? AMC, GameStop, Beyond Meat, Canoo, Lordstown Motors, and Lucid. There’s a couple of themes going on in there.
Tough talk out of the Federal Reserve may have been behind the cold front that blew over the markets’ recent hot streak. St Louis Fed President James Bullard, one of the more hawkish members of the Federal Open Market Committee (FOMC), said the Fed will continue its aggressive rate hiking plans in the near term until inflation loses some steam. It’s not that we didn’t know that, but maybe we were lulled into the lullaby that the better-than-expected slate of good news of late may have trimmed the Fed’s talons. The FOMC will meet next on interest rates on September 21, so a lot can happen between now and then. Fed officials and top econ wonks are all gathering in Jackson Hole, Wyoming, this week, as they typically do every summer. So we’ll see if that fresh mountain air calms them down a little bit.
But rather than cast our hopes for more tempered monetary policy in the future, let’s pull out our charts and look at the recent rally with some historical perspective. As of last week, the S&P 500 had recovered half of its bear market losses for the year. According to our pal Ryan Detrick, now the chief strategist at the Carson Group, the S&P 500 has never moved back to new lows after this has happened. Never. In fact, Detrick says, a year later, the market was higher every single time, an average of 19.5% higher. Does that mean it’ll happen again this time? No, but it would be an anomaly if that didn’t happen. And, as of last Friday, more than 90% of the components in the S&P 500 were above their 50-day moving average. This isn’t something you see in bear market rallies. Also, the S&P 500 was up 12.9% for the month—that’s 21 trading days. Many of the best months in history of the S&P 500 took place during major lows or in the middle of bullish moves. That’s when we don’t sell when the market’s in a freefall. The times that didn’t pan out?—2001, when the Dotcom bubble burst, 1946—coming out of World War II, and 1973, just as a global oil crisis was spilling over into the markets.
Meet Haley Sacks
Haley Sacks, a.k.a. “Mrs. Dow Jones,” is a social media influencer in finance and the founder of the financial media company FINANCE IS COOL. Haley founded FINANCE IS COOL in 2017 to learn more about money, while providing an exciting, enjoyable platform for anyone seeking to learn about finance.
What’s in this Episode?
The financial industry, like every other industry, has its fair share of influencers—people who use their knowledge, their wit, their charm, and the power of social media to spread their messages. In the world of money, there are plenty of pretenders and plenty of contenders, but there are only a few members of the royal family of influencers—those who have been able to continue to amplify their platforms, grow their followings, and stay true to the game. Haley Sacks, a.k.a. Mrs. Dow Jones, is one of them. She was born onto the internet in 2018 with that name and with one mission: to understand and teach finance to people the way they really want to learn it. She’s bawdy, she’s brilliant, and she’s bad to the bone. And she’s our special guest this week on the Investopedia Express. Welcome, Mrs. Dow Jones. So good to have you on here.
Haley: “I love it. I’m bawdy. It’s giving a hair-body-face, but B.A.W.D.Y. I know.”
Caleb: “I know you’re a little fresh. So we had to we had to give you the props.”
Haley: “You had to bring it in—you had to be a little sassy. I’m here for it, though.”
Caleb: “I know you are. So I got to ask you, what made you do what you do?”
Haley: “It was actually not a choice, it was a calling. I was born Mrs. Dow Jones. It just took me until I was, like, 26 to realize it. Money was my biggest wound, and they always say that by leaning into your biggest weakness—that’s where the brilliance and the art comes from. And so, instead of avoiding it, I ran towards it and built an empire.”
Caleb: “You sure did.”
Haley: “I sure did.”
Caleb: “But it’s not like you built it overnight. So how did you make it happen? A lot of people want to do what you’re doing—a lot of people think they’re doing what you’re doing—but you’ve got over 400,000 people who are following you across your platforms. I’ve watched you do this over the last few years and just been fascinated with the fact that you’re manifesting it, you’re really doing it, and you’re actually helping people, to boot. But how did you actually make it happen? I don’t need every step, but I know it wasn’t easy.”
Haley: “When I started, Caleb, there were no financial influencers, so it was not intentional. It really came from my own need to learn about money, and, feeling completely disinterested in the people in the space and the vibe in this space. I was like, “Honey, I do not want to be cutting spending and investing—like all the people who are doing this seems super lame.” I will stay with the people that I admire who obviously don’t talk about money because no one talks about it in pop culture and it is considered so taboo. And then, you reach a point—I reached a point where I had my first big girl job and they asked me questions about my 401K and about health insurance.”
“And I realized in that moment, like “Whoa, I can no longer run from this.” I really do have to lean in, start to teach myself, start to teach others, use social media as my platform, as the place where I was putting these lessons, and it took off. But at that point, terms like “liquidity” and “broker“—I did not even know that they existed, and then we found our way to each other. So it was really the early days and I just remember having a moment where I thought “no one likes money, but everyone likes memes,” and so I started to make finance memes because I thought, if you’re actually an entertainer, then you can make anything entertaining.”
Caleb: “Meanwhile, this was exploding across the Internet, almost across every other category, but nobody had applied it to finance and investing the way that you have, and the way that a lot of others are doing it now. We had Kyla Scanlon on not long ago. These people are, you know, creating a new language of money, and, in doing so—and you’re part of this group—you’re teaching people sort of the new way to money, with some of the same old fundamental lessons that are important. But money’s changed, and you’ve been able to help people understand how to change with it. How have you been able to do that?”
Haley: “I mean, first off, I love those people. I think that it comes a lot from my soul. Like, I really believe that what I do is art and I’m so driven by helping people and by my community. And I remember, I’m not the person who was, you know—I always talk about the lemonade billionaire, the 11-year-old who like had her own business and was flipping it—I was not that. I was exactly who my audience is when they first find me, which is clueless, intimidated, living with fear and shame, and have sort of given up on themselves in their ability to understand and to learn this stuff. And so, I’m here to make it fun, I’m here to make it entertaining, and I’m here to teach.”
Caleb: “Well you’ve got over 400,000 people, as I said, following you across every one of your platforms, and you’re constantly interacting with them through those platforms. So what are the most common questions you keep getting asked over and over? What are the themes? Is it both a male and female audience, is it a mix? What’s the sort of the proportion of the folks who are paying attention to you and what are they looking for? What kind of answers are they seeking?”
Haley: “I would say my audience is about three-fourths women, but I got a good quarter in there that are male, which they will let you know if I ever post anything that is more female-oriented, they’re like, “Hey, what about your male followers?” Which I love, because since the beginning I’ve been like, I am not a tampon commercial. As a woman, I really hate being marketed to as a woman. So I was like, If I’m going to do this, I just want to be funny. And I believe that like, you know, humor doesn’t really have a gender. It just is. And so I really look at that as like my superpower—using humor to teach people about finance. And the questions that they have are—they run the gamut—it could be, how do I start saving? How do I start investing with such little money? Do I need a health savings account? So Roth IRA. How do I invest my 401k? You know, the things that are in the zeitgeist of this world, obviously these fundamental financial questions that are never answered in school that people get to a certain point and are really…
Read More: The Measure of Financial Influence with Mrs. Dow Jones