August.
Yeah, I know you can read a calendar, but take a moment to think about how the extraordinary August economic news vacuum feeds into the current market plunge.
It’s a good environment for downside volatility.
No Federal Reserve meeting in August so no interest rate cut until September 18. Which also means no new economic projections from the Fed on GDP growth or the likelihood of recession.
No Fed Speak at all, really, with reassurance that the economy is slowing but not headed for recession, until the August 22-24 central bank gab fest in Jackson Hole.
No significant earnings news–big enough to affect sentiment at least–until Nvidia’s (NVDA) earnings on August 28.
Lot’s of Wall Street pros spending as little time as possible paying attention to market waves rather than Hampton’s surf. That leaves more of the market action in the hands of individual investors. Hence the crash of trading platforms at Schwab and Vanguard today. My guess is that Wall Street strategic thinking right now is focused on when to go long to get the recovery bump when the Fed does cut interest rates.
We do get one of the few August datapoints tomorrow, August 6, when the Atlanta Fed releases its newGDONow update.
On August 1 The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 was 2.5% on August 1, down from 2.8 percent on July 26. But clearly NOT a recession. AND certainly a slowing. The Atlanta Fed said, after the most recent releases from the U.S. Census Bureau and the Institute for Supply Management, the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic growth decreased from 2.9% and 2.0%, respectively, to 2.6% and 1.6%.
The next GDPNow update is Tuesday, August 6.
