August markets dropped midway through the month and did not recover. All major indices are down -6 to -7% for the month. All but technology are down -4 to -7 % this year and down -1 to -3% from a year ago. We are hoping for some recovery in September but have some concern that the last quarter markets may bring more of the correction that began in August. We watch China’s economy for the source of our market troubles. We have been defensively positioned for some time. A down market may bring us an opportunity to add more growth investments to accounts according to the needs of individual client goals.
Barring a recession in China, our markets and economy should continue to grow. Rising home starts bring a labor demand leading to rising inflation. So rising interest rates follow a rising housing market. The Federal Reserve will announce the interest rates increases as planned for this year. None of this will have a major negative impact on the stock market. The August market may be an anomaly.
The garden ripens. You may already know about this gem: a gardener friend told us to save surplus tomatoes by freezing them whole. In winter, running the frozen tomatoes briefly under hot water sheds the skin and they are ready for fresh tomato sauce. Now to make room in the freezer.