A volatile start to September signals that summer is firmly over for investors, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
Stocks stumble in opening hours of September
Markets have certainly come back to earth with a bump after the dog days of summer, thanks to Kevin Warsh and rising global bond yields. September’s reputation as one of the worst months of the year for markets, and in particular the US, seems well-justified, as a cocktail of worries combine to knock back bullish sentiment. But of course the first days of this month always have that ‘back to school’ feel with August out of the way, and we are already seeing some buying of the lows and a trimming of gains for volatility and oil.
Where now for global markets?
It is true that Warsh’s Friday appearance has put a 40,000 volt surge through Fed expectations for September. Investors have scrambled to price in a Fed rate hike, but as the man himself noted, this wasn’t forward guidance. Having been caught off guard earlier in the summer, traders risk falling into a similar trap – the ‘sure thing’ doesn’t exist in financial markets.
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