The dog day’s of summer on Wall Street are upon us.
The ancient Greeks would refer to the so-called “dog days” in late July and early August, as the period in which the star Sirius — also known as Alpha Canis Majoris, or dog star — appeared to rise before the sun as the hottest part of summer, one prone to bringing fever or catastrophe.
That description, perhaps, is an apt way to think about August markets in the midst of a pandemic that continues to dog investors, wreaking havoc on global economies.
“Historically August has had pretty muted performance…given the fluid coronavirus situation, the uncertainty regarding the timing of fiscal stimulus and signs of economic data stalling out, August could be more turbulent than it has in the past,” Lindsey Bell, chief strategist at Ally Invest told MarketWatch.
In fact, August has tended to be more prone to unexpected turbulence than its traditional reputation as a period in which traders and investors laze about before autumn trading action kicks off.
Last year, for example, the month began with President Donald Trump reigniting Sino-American trade tensions via a series of tweets that indicated that the U.S. would impose levies of 10% on China imports starting on Sept. 1. In 2017, a flare-up in tensions between North Korea and the U.S. drove the Cboe Volatility Index VIX, -1.21%, one measure of implied volatility in the S&P 500 SPX, +0.76%, to its highest level to that point of the year.