September 3, 2024
Good morning,
Welcome back! I hope you all had a nice end-of-summer opportunity to recharge. As many of you know, we spent the end of summer moving and we can report that we are happily ensconced in our new home in West Palm Beach, FL. Many have asked, retiring? Hardly, I’m excited about building a significant presence for Robertson Stephens in SE-FL.
Traders return from a long weekend to find risky assets somewhat on the back foot (Futures off ~.5%), as we kick off a big few days, and in all likelihood, a big few months for financial markets. Equities got through August surprisingly well, given the start of the month. The S&P 500 Index (SPX) closed up over 10% above its lows of the month. That’s not unheard of, but it is the sort of thing that usually comes after large drawdown periods compared to August’s 48-hour drawdown. It’s only the 14th time since 1928 that it’s happened with the monthly close within 5% of all-time highs (in this case, less than 1%). It’s a small sample set, so it’s hard to discern its significance, but what we can say, at a minimum, is that volatility is up, and the equity market was extremely sensitive to data suggesting that economic growth may be faltering.
Recall the weak ISM manufacturing figure on the first day of last month that helped catalyze steep losses. We get ISM again today. On top of that, the biggest data point of recent weeks – the August Employment Report – comes out Friday. Worth noting is that the Fed’s quiet period ahead of the next Fed meeting begins at the end of this week as well. Therefore, what we’ll have to suffer through for the next two weeks is endless debate over what the Fed should/will do on 9/18 – 25 or 50 bps cut. My bet is 25, for my $.02.
More about the second half of the year on Thursday. See you then.
Be well,
Mike
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