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.)

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.

All these rumors could work out to Intel’s benefit. That’s something no investor can know. What we can know is that the road to recovery will be a rocky one, fraught with disappointments along the way. It is all but certain that at some point, Intel stock will once again be far cheaper than it is today. And at that later date, investors will have far more information to be able to judge the likely success of the promised comeback. We’re not going to buy the rumors. We will wait for the news.

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap.

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap.