We have officially hit the “Dog Days of Summer”. It’s the time of year where Americans are in vacation mode before summer’s end. The weather heats up and activity slows down. Congress is in recess. Corporate earnings season is coming to a close. Wall Street moves to the Hampton’s. The long baseball season hits a rough patch before the September pennant race commences. Americans generally take the time to relax, unwind and recharge their batteries for the year- end push. The European continent tends to take the whole month of August off.
In Ancient Rome, it is believed the Dog Days lasted thru August 24th. The Romans referred to the Dog Days as “dies canicularas” and associated the hot weather with the star Sirius. They considered Sirius to be the “Dog Star” because it is the brightest star in the constellation Canis Major (Large Dog). The term Dog Days was also used by the Greeks. Back then, the Dog Days were popularly believed to be an evil time when the ocean boiled, wine turned sour, dogs grew mad, diseases spread, and all living creatures became lethargic. Or perhaps, it was just the fact that the heat made people irritable and food and wine spoiled without refrigeration.
The Dog Days of 2014 sure are living up to historical precedents. Political and Economic activity have slowed down in August while Geopolitical tensions have risen. The world is an angry place. Cool heads generally prevail, but it usually requires blow-ups and pain to get there. The only question is how long and how much pain. The issue between Russia and Ukraine is a perfect example of this. But so is the Middle East and even Ferguson, Missouri.
We take these global events very seriously. Sometimes they have an impact on the Market and your investments, and sometimes they don’t. The Market hasn’t been too concerned about Geopolitical events thus far in 2014. The S&P is still near the all-time highs. But that doesn’t mean it doesn’t care. Considering the seasonal slowing of normal activity, the media continues to seize the opportunity to showcase to capture viewer attention. It’s a consequence of the always open, 24/7 world we live in.
We’re on top of it, and continue to execute our action plan for 2014. It’s working.
Enjoy your weekend. Stay cool. We’ll be back dark and early Monday.
By: Mike Frazier