What the heck is going on?
Investors tip-toed into August and were greeted by an unexpected cyclone from Japan. However, as quickly as the storm entered our orbit, it moved on, and the S&P 500 Index is pushing toward a new high.
The equal-weight S&P 500 is trading at a record high.
August and September have historically been challenging months for investors.
While historical patterns sometimes have predictive value (and the month isn’t over), these aren’t hard and fast rules.
Economic fundamentals shouldn’t be discounted. In my view, fears of an imminent recession were overblown, and the Fed is gearing up to cut interest rates.
Rate cuts that coincide with a soft landing have historically supported stocks (mid-1980s, mid-190s, 2019(, while those that accompany a recession do not (2001 and 2008).
