Summer's Over!

Today, Labor Day, marks the unofficial end of summer. With vacations coming to an end and the kids heading back to class, we can begin to look forward to the final quarter of the year. Of late, we have received relatively positive news on the economy with inflation stabilizing, energy prices falling, the Fed pausing, earnings growing and markets moving higher. We believe this favorable trend will remain in place for the balance of the year.

However, September has been a tough month for stocks in the past. The third calendar quarter (July, August, September) is notoriously difficult for companies and analysts to forecast. People go on vacation, severe weather can have a major impact (as it did last year) and there is a tendency to push for a strong fourth quarter at the expense of a quiet third. Thus the chances of nasty earnings surprises and market volatility are high. So as the earnings reports come in, we'll be looking for evidence of sustained growth in the fourth quarter and next year to confirm our positive view of the markets.

Happy Labor Day!