The ride continued into August. It might seem like forever ago, but August was fairly volatile as well. The S&P500 had a 6% selloff at the beginning of the month that promptly reversed to give us a 2% gain. It’s not really uncommon to see selloffs that recover throughout the year. In fact, on average, stocks pullback 5% or more three times per year!
The Federal Reserve has been much more open to rate cut conversations lately. The markets are expecting a cut at this point. If we don’t get one, it will be a bit of a shock, which will probably lead to another pullback.
Us employment numbers were revised downward by 800,000 jobs over the last 12 months! This was the largest revision since 2009. It is what it is at this point, but it does mean that investors and the Fed have been working off faulty data for the last year. This will probably give the Fed another reason to cut rates by 0.25%, if not something more aggressive at 0.50%. All eyes will be on the Fed’s meeting on September 17th and 18th.
Volatility has kicked up a bit. The S&P500 had its biggest percentage gain since 2022 on August 8th. That was coming off the pullback that we saw at the beginning of the month. The markets seem to be wrestling with struggling economic news and the hype of a rate cut. Like I mentioned last month, it’s a double-edged sword. Rate cuts spur the consumer but needing them isn’t necessarily the best of economic signs.
That’s probably enough economic talk for now. Don’t forget that we are near record highs so it will be a bumpy road trying to break through. It’s important to be comfortable with your risk tolerance. I’m happy to talk with you about this at your annual review (or any time for that matter).
Cheers to a great Fall! The kids and grandkids are back in school for many of you. I’m sure the routines are in full swing by now. Thanks for being a client of ours. You are very much appreciated.
Larry Mroczkowski
President
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.