Value Pick of the Week

No Value Pick of the Week. We do, however, have a post that will help people decide if they’re financially ready to begin investing in the stock market at https://therousehouse.net/investing-economics/minimum-financial-readiness/.

Market Summary

The S&P 500 climbed 0.4% for the week while the Dow fell 0.6% and the Nasdaq climbed 0.1%.

  • Cooler inflation data was the week’s engine — July CPI came in at 3.4% year-over-year, down from 3.5% in June and in line with expectations, with the monthly figure up 0.1%. Core CPI rose 0.2%, easing the annual core rate to 2.5% from 2.6% — the smallest annual increase since February.

  • September rate-hike fears receded — fears of a Fed rate hike in September eased behind the softer economic data and cooler inflation readings.

  • New record highs mid-week — the S&P 500 closed at a record on Thursday, clearing 7,800 for the first time.

  • Earnings kept feeding the AI trade — this remains a market driven by strong earnings growth fueled by AI infrastructure investment, with stocks in “melt-up” mode alongside low volatility (VIX at 14.50) and light summertime volume.

  • Friday gave some back on consumer weakness — the S&P slipped about 0.2% Friday after deteriorating consumer sentiment, with headline retail sales falling 0.6% against expectations for a 0.1% gain. This is somewhat concerning for the coming weeks — consumer spending drives the market.

Target and Walmart report earnings Wednesday and Thursday, respectively. The reports of these two behemoths of retail will tell us more about declining consumer sentiment and the true state of retail.

How Our Picks Fared

Our past picks did well, picking up 1.3% against the benchmark S&P 500. An amazing 38 of our picks beat the S&P, gaining an average of 4% during the week, with only one company increasing by more than 10%:

📈 Western Digital (WDC) rose 17.2% after dropping 20.3% during the prior week.

  • The primary catalyst was SanDisk’s Investor Day on August 13 — SanDisk (SNDK), Western Digital’s former Flash subsidiary, projected mid-teens annual revenue growth for fiscal years 2028 through 2030 underpinned by expanding AI infrastructure demand, and signed multi-year contracts with eight customers under a new business model — WDC surged Friday extending the memory and storage rally.

  • The memory/storage sector rallied all week, not just Friday — the sector was moving as early as August 10 and 12, so this was a sustained re-rating rather than a one-day pop. Zacks upgraded WDC to Strong Buy amid strong earnings expectations and positive sector trends.

  • The setup made the bounce mechanical — after last week’s collapse, WDC was trading about 9% below its 50-day moving average. The stock had been pulled well below its 52-week high of $799.87 by the post-earnings dip, leaving plenty of room to recover on any positive catalyst.

  • The underlying fundamentals never actually changed — FY2026 revenue was up 35.70%, with earnings up 403.58%, and WDC has secured long-term AI storage agreements with hyperscale customers running through 2031. Last week’s selloff was about guidance framing, not deterioration.

The yo-yo that WDC is on — down 20.3% one week, up 17.2% the next, on essentially zero change in the company’s actual business — is based on sentiment and positioning. It’s a good illustration of why the buy-and-hold investing theme holds up, and a good example of how crazy the market can be short-term.

Have a great week!

View the complete Value Picks Tracker →