Why August in a pandemic is a time for vigilance for stock market investors
published 01.08.2020 15:23
China’s yuan CNYUSD, 0.00 CNHUSD, 0.00 devaluation and sluggish economy in 2015 helped to fuel the worst August performance in 17 years, amplified by angst of a rate-hike by the Federal Reserve to normalize monetary policy (that seems so far away now), and weakness in global energy markets.
A modicum of progress was enough to hep the Dow Jones Industrial Average DJIA, +0.43%, the SP 500 and the Nasdaq Composite Index COMP, +1.48% finish in positive territory on Friday, along with a heaping dose of Apple’s share AAPL, +10.46% rally, on Friday.
August’s performance on average is up 0.63%, as gauged by monthly returns for the SP 500 index since inception.
However, during election years, August returns 2.87% on average, marking the best monthly performance by some margin, with July’s returns during election years second on average at 2.08%, Dow Jones Market Data show (see attached table).
Source: Dow Jones Market Data So far, July has lived up to its billing and then some, with the SP 500 up 5.51% in July, the Dow returning 2.38% and the Nasdaq Composite registering a 6.82% gain, on the back of unfettered appetite for technology and e-commerce stocks.