August hasn’t been a great month for equities, the weather or crypto.
I do think some of the drop was accentuated by lower trading volumes that occur at this time of the year.
While we in Texas get back to school in the middle of August, the rest of the nation holds off a bit and you have many still on vacation.
I feel that is why the period after Labor Day can be so volatile. You take that with the fact that most budget years begin Oct. 1 and the real New Year begins way before January 1.
This week, Fed Chairman Powell will speak in Jackson Hole on
the state of the economy.
Many are concerned that he will not be lowering interest rates.
The recent rise in the 10-year Treasury shows sentiment is starting to lean more toward rates remaining where they are.
It seems that it is hard for analysts to understand that zero interest rates for over a decade and a half are not the norm.
It seems we have lost sight of the fact that for decades interest rates remained around 5% and the economy prospered.
What they really will have to focus on is the fact that we will have to pay back all the debt we issued at 5% which is no small bill coming due.
The bright star of the Magnificent Seven in Nvidia will provide an earnings report this week.
It is ridiculous to speak ill of such an innovative company.
They saw what is coming and built a chip to meet the future demand.
The remaining chip companies are back building essentially base commodities with little or no pricing power. They are base components like copper or steel.
I know that the multiple is way beyond my tolerance, but these people are way ahead of the pack.
It does seem that all of the buzz around AI and EVs is becoming a little stale. AI’s reality is that it is here and will grow, but no one can figure out how big.
Moreover, many companies are scrambling to compete and finding it costly and with little current return. It is sort of selling on the promise with little to show.
The reality of electric cars is also apparent. It may work for the well to do, but what will the majority of society do?
It might catch some in the middle class but poorer people have no part in the game.
I mentioned crypto earlier and in case you haven’t noticed, Bitcoin after rising to 30,000 moved down to 25,000. That is no indictment, but it is a fairly quick move down.
The new trend might be stable coins tied to the dollar.
For all the concern about Fitch downgrading the dollar, Argentina is contemplating moving from the peso to the dollar as inflation continues to run rampant in South America.
This is all to say much about nothing. We are at the end of summer and things are about to change.
We just had our first hurricane.
The only thing that you can really count on is change and it is coming at you with the bright lights on.
Now we will see how adaptive we are this time around.