How Do Major Stocks Trade This Fall?

Have we seen the normal August trading lull that we usually see during the Dog Days of Summer?

Our Chief Equity Strategist and Economist, John Blank, has been keeping his eye on that. He’s here now with the answer.

1. So, until last Friday, have we seen lower daily trading volumes causing higher volatility that would indicate many traders are on summer vacation and, overall, there has been an August lull?

2. Back on August fourth, published data showed the Dow 30 index was the only benchmark that had yet to hit a new peak after April's tariff panic. But that changed last Friday when Fed Chairman Powell signaled the Fed could begin easing monetary policy next month, in his annual Jackson Jole speech. That sent the Dow to an all time high. In fact, there was a pretty broad based stock rally as well. I guess he gave the market exactly what it wanted to hear?

3. September is typically not a good month for stocks. Might this late summer rally extend into next month aided by a rate cut?

4. Is there still uncertainty affecting the market?

5. Is there any reason for stock market bulls to be cautious going into fall?

6. Tech stocks sold off a bit recently. Are investors rotating out of the riskier stocks into previously lagging sectors because they’re worried about the staying power of AI?

7. Will it be difficult to pick winners out of the AI universe going forward?

8. But against this backdrop, does a stronger than expected Q2 earnings season and a bullish outlook for earnings into next year, suggest to you that the S&P500 has more room to run higher, at least, for the rest of this year?

9. Two major U.S. financial services stocks and one major French industrial have been on your radar lately. Charles Schwab SCHW, Citigroup C and Schneider Electric SBGSY.

Our Chief Equity Strategist and Economist, John Blank, on stocks and the August trading lull. With John, I’m Terry Ruffolo.

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This article originally published on Zacks Investment Research (zacks.com).

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