August was a good month for equity markets. The S&P 500 led the way by gaining 7.19%, however smaller company stocks were not too far behind. Developed international stocks also rose in their local markets but US investors got an additional tailwind from a weakening US dollar. Emerging markets were a relative laggard, but still posted a positive month. In the bond market, rates rose a bit in the government bond market leading to a modest decline for the US Aggregate Bond index. Corporate borrowers continued to enjoy healthy capital markets as spreads continued to narrow.
Much of the commentary surrounding the market rally has recently focused on the biggest technology stocks leading the way. While it is true that technology has led the way and has made for an environment where keeping up is difficult, it is not the only sector that has done well. We think most of this commentary is more of a thinly veiled “dog ate my homework” excuse than anything.
As we get into the fall, election season is in full swing. We have no commentary or leanings as a firm, as politics is something of a religion these days and we choose to remain agnostic. We also have no predictions on the outcome, but we remind clients and readers that the market sees the polls too. We would caution clients that even if one could predict the outcome, they may whiff on the market prediction.