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By Alex
Eule | Tuesday, August 31 An
August Streak. Another month, another
gain for stocks. The S&P 500 closed August
up 2.9%. It's the index's seventh consecutive monthly gain, the longest
streak since a 10-month stretch ending in January 2018. While Covid
has raged and the reopening has faced uncertainty, stocks have been buoyed by
decent-to-strong economic numbers, a continuation of accommodative
policies from the Federal Reserve, and, most of all, banner
corporate earnings. But all of
that good news could be tested in the coming weeks, with stocks facing their
toughest month of the year. Going back to 1928, September has provided
the worst returns of any month, with the S&P 500 down an average of 0.99%
during the month. September is the only month of the year
when stocks have fallen a majority of the time -- 54% across 94
Septembers. (Thanks to our colleagues at Dow
Jones Market Data for crunching those numbers.) As for
today, the S&P 500 finished down 0.1%, just off yesterday's record
close. Barron's Lisa
Beilfuss writes that it could
have been worse. She notes that the Chicago
Business Barometer, a broad measure of
economic activity, fell sharply because of rising backlogs and a
lack of production. "Firms say the available supply of raw
materials and workers isn’t sufficient to keep up with new orders," the
report stated. Tomorrow
brings another read on manufacturing activity and potential shortages,
with new data from the Institute of
Supply Management. Last month's purchasing
managers' index showed a 14th consecutive month of expansion, though supply
shortages contributed to the slowest growth since January. Economists are
forecasting continued expansion, despite another decline from last months'
growth rate. On Friday, investors
will have to digest the latest jobs numbers, when the U.S. Labor
Department releases its August payrolls
report. Last month's edition was "just good enough," we wrote.
The key takeaway then was that the headlines jobs number was better than
expected, while inflation data was fairly tame. The just-right scenario
helped lay the foundation for August's strong returns. Then again,
investors also had an ongoing wave of earnings reports to keep them occupied.
The coming days are not nearly as active on the earnings front with just
a handful of big company reports on the schedule. That leaves investors with
more time to obsess over the jobs data -- all in a month they would
probably be happy to just skip altogether. |
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DJIA:
-0.11% to 35,360.73 The Hot
Stock: APA Corp +4.4% Best Sector:
Real Estate +0.6% |
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