August 2, 2021
Good morning,
Welcome to August. Our new month looks to open with a fresh assault on new all-time highs on many of the major indices including S&P Futures which are up 20pts or half a percent pre-market at the moment. It probably helps that China saw quiet trading in their market overnight for a change. The big event this week does not come until Friday with the release of July’s employment figures. But while expectations are positive for a good number, one month will not make a trend nor likely push the labor market figures through the roughly defined.
Fed thresholds cited as a pre-requisite for action. On that topic, the next Fed gathering is Jackson Hole later this month. It may be a snoozer if comments last week by a Fed governor about needing September data (released in October) to make any decisions about tightening are to be believed. If so, reporters may have a hard time justifying the Wyoming trip to their bosses as anything more than a boondoggle.
If China calms and the economic data this month is deemed irrelevant due a temporarily frozen Fed, then August may just see more status quo for this second year bull market – daily volatility, continuous internal rotation, and just slightly higher highs or near misses of same across the board. Sounds like a good market prescription to take a vacation from.
Be well,
Mike