More wild roller-coaster rides – and a chance for more summer stock swoons – is the financial forecast for August, as Wall Street continues to eye potential headwinds such as coming interest rate hikes from the Federal Reserve and a still-wobbly stock market in China.
Prepare for more wild price swings, say Wall Street money managers and investment strategists that USA TODAY contacted to get a sense of whether the long, hot, volatile summer in financial markets will wash ashore on trading desks in the dog days of August.
Wall Street was hit by waves of worry in July, with stocks gyrating sharply amid fears of a Greek financial meltdown and anxiety created by a massive price decline in shares of mainland China stocks that has erased nearly a third of the market's value and raised fears of a global economic slowdown. U.S. growth clocked in at 2.3% in the second quarter, a tad below estimates but better than the weak 0.6% growth in the winter-affected first quarter.
August hasn't been a super-bullish month for stocks, either, according to data from Bespoke Investment Group. In fact, it ranks last in monthly performance for the Dow in the past 20 years, posting an average loss of 1.1% and finishing up in August only 55% of the time, according to Bespoke.
Should investors expect more turbulence, despite an 11th-hour bailout deal for Greece in mid-July and waning fear that a China stock crash will infect the Chinese and global economy?
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