4 Trending Topics and 1 Stock: A Weekly Recap

In this weekly article, we recap four of the financial market’s most trending topics of the past week and finish with a quick glance at a small-cap stock we think is worth revisiting. Let’s go!

• Defense stocks explode: Defense stocks are rising with the continuation of geopolitical tension worldwide, especially the war in Ukraine and the growing tension in The Middle East. The defense sector’s index soared 9.2% in July, outperforming the S&P 500’s 1.1%. There seems to be no end to both conflicts, which means good news for the defense contractors and their stocks. Click here to read more on this topic.

• The Fed’s anticipated rate cuts: Many market participants and the media seem to be pushing for the Federal Open Market Committee (FOMC) to announce cut rates, igniting a slowing market again. However, the FOMC has a balancing act of keeping employment high and inflation low, and tempering with rate price can cause a very different outcome. There’s a genuine fear it will cause a “hard landing” of the economy, or in other words, recession. Click here to read more on this topic and the Bank of America’s warning.

• Crowdstrike’s (CRWD) outage aftermath: It’s been two weeks since the Crowdstrike (CRWD) outage shut down millions of Windows users worldwide, and the consequences are yet to be determined. While many have predicted the software’s update error will cause a decline in the company’s stock (which has happened), some analysts think it’s only temporary, and Crowdstrike’s strong position in the market will prevail in the long term. Click here for more news on the fallout.

• Small-caps on the rise: After three years of dominating the market, the mega-caps are slowing down, and we see a more balanced market. In the last three months, the “Russell 2000,” representing the small-caps, has outperformed the S&P 500 (SPDR) by over 5%. Many Wall St. analysts see it as a positive turn of events for the whole market. Since the 1920s, small caps have produced better results than larger caps, so this narrative aligns well with the market’s history. For more on this topic and its importance, click here.

• SentinelOne (S): Small-caps seem to be a theme in this article, so we want to finish with a quick review of SentinelOne (S), a company in the cybersecurity sector. Due to CRWD’s misfortune, other companies can become beneficiaries, and SentinelOne sure looks like a competent rival. After the Crowdstrike IT outage, S’s stock has surged over 20% in five days and is in a good position for growth in an industry projected to be worth around $500 billion in 2030. For more on S stock, click here.