Log Out of Your Brokerage Account Until Labor Day

Although the S&P 500 closed at all-time highs again yesterday, the markets have materially slowed down over the past week.

With a busy week for earnings ahead, there may be some more upside. But seasonally, August is a slow month for stocks, and September tends to see markets pull back.

Here’s a chart worth saving and referring back to – it’s a composite that shows the S&P 500’s average daily performance throughout any given year:

Turn Your Images On

The seasonal weak period for stocks has arrived.

Why do markets slow down in the lazy days of summer?

Historically, it’s when brokers used to take their vacations and motor off to the Hamptons.

Today, with algorithms running the show, it’s harder to say why.

But it’s a trend that has largely remained intact over the decades, and while past performance doesn’t show future performance, it’s a seasonal trend worth remembering.

If you’re not a trader, you can probably log out of your brokerage account for the next few months and not miss anything.

If you’re a trader, beware – the lack of a clear direction either way could be a challenge. And a slowdown in markets could precede an autumn selloff. Now isn’t the time to make overly leveraged trades, and to exit them if you’ve been in them.

After this year’s “Liberation Day” slide lower, stocks may not be inclined for a massive pullback this summer – but it would be healthy for markets before a year-end rally.

~ Addison

P.S. With markets slowing down now, they’re at greater risk of breaking lower following their massive rally over the past few months.

As we learn more about tariffs and trade deals – not to mention earnings – over the coming weeks, the seasonal selloff period in September and October could be more volatile than usual. Another reason to avoid leverage, and enjoy other things in life besides the stock market for the next few months.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three.

Although the S&P 500 closed at all-time highs again yesterday, the markets have materially slowed down over the past week.

With a busy week for earnings ahead, there may be some more upside. But seasonally, August is a slow month for stocks, and September tends to see markets pull back.

Here’s a chart worth saving and referring back to – it’s a composite that shows the S&P 500’s average daily performance throughout any given year:

Turn Your Images On

The seasonal weak period for stocks has arrived.

Why do markets slow down in the lazy days of summer?

Historically, it’s when brokers used to take their vacations and motor off to the Hamptons.

Today, with algorithms running the show, it’s harder to say why.

But it’s a trend that has largely remained intact over the decades, and while past performance doesn’t show future performance, it’s a seasonal trend worth remembering.

If you’re not a trader, you can probably log out of your brokerage account for the next few months and not miss anything.

After this year’s “Liberation Day” slide lower, stocks may not be inclined for a massive pullback this summer – but it would be healthy for markets before a year-end rally.

~ Addison

P.S. With markets slowing down now, they’re at greater risk of breaking lower following their massive rally over the past few months.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

Mining stocks amplify everything. First Majestic went from losing money to 45% margins without building anything new. They just held the line on costs while silver did the heavy lifting.

That cuts both ways. If silver drops hard, margins compress just as fast. Same leverage, opposite direction.

The miners with the lowest costs and cleanest balance sheets will hold up best in a pullback and capture the most upside if the deficit keeps grinding.

Economists at Goldman Sachs said this morning they expect core inflation to finish the year around 2% even while GDP rises at a “surprisingly strong” 2.5% clip.

In our view, their inflation forecast is optimistic. Their GDP call? Modest.

The last time we pumped this much liquidity into the system — 2020 through 2022—the result was a manic asset bubble, runaway inflation, and an epic hangover at the Fed.

Goldman’s optimism has triggered a fresh round of bullish bets: cyclical stocks are rallying, “dispersion” in the S&P 500 is spiking, and the Fed is expected to cut interest rates twice before Jerome Powell gets kicked out of Washington at the end of his term on May 15.

Anecdotally, we’re hearing stories of warehouses full of GPUs sitting unused for lack of energy to power them. It’s a natural feature of the heavy capital investment in new machines. The grid has to catch up!

While Trump’s great reset rolls on in 2026, keep an eye on modular nuclear reactors and increased demand for uranium, natural gas and related resources.

These PM producers are literally printing the most ‘hard money’ that they ever have at these metals prices and record margins here at the midway point in Q4.

If there ever was a time for this sector to get overheated and frothy, this would be it… only that isn’t what we’ve seen playing out.

PM producers are still insanely profitable at even at current metals prices and should be far more valuable based on their margins, revenue generating potential, and their resources still in the ground.