August is here and the month doesn’t have an upward seasonal bias. Overall, it is one of the more challenging months of the year, coming in at 0% on average, but weaker lately. The first day of August is also the single worst first day of the month in the calendar. However (isn’t there always?), because of how well July closed, the first week of August is a seasonally strong period. In other words, buy weakness to begin the month and sell strength for those who are nimble.
Fitch, the bond rating service, downgraded the U.S. credit rating last night from AAA to AA+. Recall that S&P did the same thing in August 2011. Although the markets will likely respond negatively today, I do not place much importance on this. Fitch did not uncover any new news. They reported what everyone already knew. This whole notion of Modern Monetary Theory (just print all the money you need) is 100% nonsense and garbage. The U.S. borrowing path is unsustainable. Well, DUH!
I do laugh at their statement about the erosion of confidence due to “repeated debt limit political standoffs and last minute resolutions”. This is something new? And they see “expected fiscal deterioration over the next three years”. Well, who doesn’t?
As I said, markets look lower which comes as no surprise to my readers. I just wrote several pieces about how I have tempered my exuberance for stocks as I was looking for a bull market, single digit pullback during the August/September time period. Thunderstorms Brewing The bull market isn’t over and this will pass. New highs remain in order.
ICYMI (in case you missed it), I did a super fun segment with my friend, Tim Lammers, on FOX61 last week where I offered some tips on a mid-year financial check up as well as my market thoughts to year-end. You can watch the video HERE.
While on set, we recorded a bunch of quick hits and you can see the segment on why lower inflation still means higher prices HERE.
On Monday we bought PMPIX and XLB. We sold HCPIX. On Tuesday we bought more XLB and levered S&P 500. We sold FUTY and PMPIX.
