Recent Stock Market Volatility
After a quiet June, stock market volatility returned in August. The summer’s counter-trend rally is over and investors are starting to watch some key support levels. A pullback to 38.2% or even 50% Fibonacci levels wouldn’t surprise me as economic data is starting to show the Fed still has a lot of work ahead of itself.
Monthly Market Summary
The S&P 500 Index returned -4.1% during August, underperforming the Russell 2000 Index (-2.0%) for a second consecutive month.
Energy (+2.7%) was the top-performing S&P 500 sector during August despite oil prices falling -9.7%. Utilities (+0.5%) was the only other sector to produce a positive return. Technology (-6.2%) was the worst performing sector as interest rates rose, followed closely by Health Care (-5.8%) and Real Estate (-5.6%).
Corporate investment grade bonds generated a -4.4% total return, slightly underperforming corporate high yield bonds’ -4.3% total return.
The MSCI EAFE Index of global developed market stocks returned -6.1% during Aug…