Welcome to our August 2024 Market Update!
Well, it looks like volatility has returned with a vengeance so let’s get right into this month’s commentary. The S&P 500 rose just over 1% in July to extend its string of gains, 1but that’s where the good news came to at least a temporary end!
In this update, we don’t usually talk about the current month, but it’s hard to avoid following some intense selling we saw in the first few days of August.1 As earnings season wrapped up for most companies, and I believe the numbers still looked solid, we saw a weaker than expected nonfarm payroll report.2 In my opinion, this is leading investors to believe the economy may be more vulnerable than everyone thought.
Interestingly, the Federal Reserve also met during the same week and expressed confidence not only in their inflation management but also the economy.3
So what does all of this mean? Let’s just look at some facts and year-to-date numbers. The S&P 500 stands up 14.2% after the 8/1 decline.4 Not bad in my opinion and probably due for a temporary pullback. In August, there is something called “seasonality” that may affect stocks. Since 1954, the S&P 500 has generally traded flat during the month of August and only finished higher 54% of the time.5 Simply put, I feel this is due.
Another item to note is interest rates have been falling rather quickly from a high in the 10-year US Treasury at the end of June of 4.4% yield all the way down to 3.80% on August 2nd.2 How does this affect investors? When interest decline, bond prices usually rise. In effect, this diversification may help soften the blow of declines in stocks.
In a nutshell, markets feel fine to me and it’s important to hang in there as we face some volatility. Please let me know if you have any questions, concerns or feedback and we’ll do our best to make sure this environment is comfortable.
Thank you for your continued confidence in me and what we do and see ya next month!
Successfully,
Tim Truebenbach, CFP®
Senior Vice President – Financial Advisor
Disclaimers and Sources
1 Source: Thomson ONE Reuters, 8/2/2024
2 Source: CNBC, Stock Market Today, 8/2/2024, Dow loses 850 points after weak jobs report
3 Source: Barron’s, Fed Meeting Today: FOMC keeps Rates Steady, 8/1/2024
4 Source: Investors Business Daily, Big Picture, 8/1/2024 Market Indicators
5 Source: LPL Research, August Seasonality Cools, 8/1/2024
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.
Content in this material is for general information only and 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.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.