Spun off from eBay in July 2015, PayPal is a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. It accepts payments from merchant websites, mobile devices and applications, and at offline retail locations through its PayPal, PayPal Credit, Venmo, and Braintree products. PayPal processes transactions in more than 200 markets and in more than 100 currencies, and allows customers to withdraw funds from bank accounts in 56 currencies and hold balances in PayPal accounts in 25 currencies.

The stock market tried its best to rally on July 29, but with major EPS reports, a Fed decision, and an employment report looming, higher prices attracted sellers and the major indices finished flat. The market will either continue lower in the near term or the pullback will end and new highs are just around the corner. We would bet on the former, as there is no indication from the recent price action of the S&P 500, Nasdaq, and Nasdaq 100 that the selling is over. While the tech-heavy indices, industries, and mega caps have worked off overbought momentum conditions on a daily and weekly basis, we have not yet cycled into oversold territory on a daily basis. Do we have to? Absolutely not -- but it probably would be healthy. The last time Technology indices/stocks were oversold on a daily basis was on April 19 -- but just barely, with the 14-day relative strength index reaching 30. The last time tech was oversold on a weekly basis was in mid-2022 -- and prior to that, during the pandemic. Long-term relative strength leadership rarely cycles into oversold territory on a weekly or monthly basis except during mega meltdowns and crashes. So there is a smell of panic in Technology land as the 'can't miss' semiconductor stocks are stinking it up. But at least the money fleeing those stocks is being moved into other areas of the market. The NYSE, Dow Jones Industrials, the S&P 500 equal weight, the S&P MidCap 400, the Russell 2000, and the S&P Small Cap 600 continue to catch a bid -- with most remaining near all-time highs. As of this writing, the iShares Semiconductor ETF (SOXX $220.58) has cratered almost 17% over the 14 sessions, its largest decline in that time period since June 2022 (which was during a tough bear market for Information Technology). There is a cluster of support near $200, which includes the last low in April, trendline support off the lows since October 2022, and a 38.2% retracement of the bull market. Distribution days on the Nasdaq 100 (QQQ) and the SOXX continue to add up as we count seven on both ETFs over the past 14 days.

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 426 million active accounts at the end of 2023. The company also owns Venmo, a person-to-person payment platform.

Two important inflation reports released last week indicated that overall pricing pressures have retreated from peaks in 2022. But both also confirmed that inflation remains above the Fed's target of 2.0% and progress to that level may be hard to achieve. With the Consumer Price Index (CPI) report, there were some positive results. The overall inflation rate in June was 3.0%, lower than the prior month's 3.3%. That good news was further supported by a decline in core CPI, which excludes the impact of food and energy and rose at an annual pace of 3.3% over the past year, lower by 10 basis points month over month. What's propping up that core CPI? Transportation Services (+9.4% YOY) and Shelter (+5.2% YOY), which have prices that don't typically fall sharply. In contrast, prices for Gasoline and New & Used Cars are actually lower YOY. The other inflation report was the Producer Price Index (PPI), which measures pricing trends farther up the supply chain, at the manufacturing level. Here, we also saw a modest increase in the rate of inflation. The PPI final demand annual rate through June was 2.6%, compared to 2.2% in May, and the prices for processed goods for intermediate demand outright declined. The June 2022 CPI rate marked the peak reading for the index that cycle, and we expect pricing pressures to continue to ease as the housing market cools, supplies of new vehicles are replenished, and the price of oil stays below $90 per barrel. The Fed lifted the feds fund rate from 0.0% to above 5.25% over the past 24 months, and the rate hikes appear to be reducing inflationary pressures. We still look for the U.S. central bank to be lowering rates in 2H24 and 1H25 as concern shifts more toward economic growth.