Why August in a pandemic for stock-market investors is a time for vigilance - MarketWatch

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.

drove the Cboe Volatility Index.

devaluation and sluggish economy in 2015 helped to fuel the worst August performance in 17 years, amplified by angst of a rate-hike by the Federal Reserve to normalize monetary policy (that seems so far away now), and weakness in global energy markets..

“I think in terms of market outlook we’re all laser focused on two things: 1) the outcome of Fiscal Stimulus / extended [unemployment] benefits and 2) the path of the virus,” Michael Antonelli, market strategist at Robert W.

Emerging from the weekend without some path toward some further aid from Congress for suffering Americans and corporations could inject fresh volatility into markets to start the month.

Meanwhile, the Cboe Volatility Index, which tends to rise when markets fall because it reflects buying in options contracts intended to insure against drops in stocks, has been trading well above its historical average

The index, which is colloquially referred to by its ticker, VIX, has a long-run average at 19.38, and hit an all-time high above 80 in March, a week before stocks hit a recent nadir on March 23, amid the worst of the outbreak of the novel strain of coronavirus that causes COVID-19

VIX, which closed at 24.46 on Friday, has been trading above its historic average for 111 trading days, with 117 trading days representing the longest trade above its mean since Jan

11 of 2012, according to Dow Jones Market Data

Despite the angst about the outlook for August, however, there is cause for optimism

August performance in presidential election years has been stellar

August’s performance on average is up 0.63%, as gauged by monthly returns for the S&P 500 index since inception

However, during election years, August returns 2.87% on average, marking the best monthly performance by some margin, with July’s returns during election years second on average at 2.08%, Dow Jones Market Data show (see attached table)

Real-time last sale data for U.S