Why August in a Pandemic is a Time for Vigilance for Stock Market Investors

The dog days of summer on Wall Street are upon us.

The ancient Greeks would refer to the so-called “dog days” in late July and early August as the period in which the star Sirius — also known as Alpha Canis Majoris, or dog star–as the hottest part of summer, notably because the star appeared to rise just before the sun. It signified a time prone to bringing fever or catastrophe.

That description, perhaps, is an apt way to think about August markets in the midst of a pandemic that continues to dog investors, wreaking havoc on global economies.

“Historically August has had pretty muted performance…given the fluid coronavirus situation, the uncertainty regarding the timing of fiscal stimulus and signs of economic data stalling out, August could be more turbulent than it has in the past,” Lindsey Bell, chief strategist at Ally Invest told MarketWatch. Read more…

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The United States and Europe have posted their biggest economic decline in decades. Business investment, exports and consumer spending all dropped as coronavirus lockdowns put the brakes on economic activity. In both the US and the European cases, the record dropsin GDP come despite major government spending programs during the COVID-19 pandemic.

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