Kicking The Sand Out Of The Shoes

Years ago when I worked for a certain brokerage firm, the head of our division got on the squawk box {Yes that's where CNBC got the name for their show} and gave a speech each Tuesday after Labor Day to the troops all over the country.  It was always referred to as the "Time to Kick the Sand Out of the Shoes" speech because he always made that comment somewhere in his talk.  The message was simple.  Summer's over.  Time to get back to work.

In the wheel of the year under which Wall Street marks time, July and August are the only periods when making money takes a backseat to more leisurely pursuits.   As we've discussed many times in the past, folks in the investment class, particularly those out east, tend to be more interested in being at the beach or in the mountains than in front of their screens.  It's one of the reasons that August can sometimes be volatile.  Events come up and the "A" team is away.   

Now though summer is over.  September and early October with all their historical ugly ghosts looms.  After that  will likely come the mad dash into the end of the year for institutions to show positive numbers for the clients who pay Wall Street's bills.   As we begin to contemplate colder weather here in the north, here's  a partial list of what the investment community is going to be watching:

In 2021 everything leads back to Covid-19.  What will be the path of the virus this fall.  What will be the economic toll from it.  What kind of restrictions will be put in place and are there perhaps more deadly variants of the virus lurking out there.  For now I believe the vast majority of Americans are chasing to go about their lives in spite of the virus.  That will change I think if a mutation shows up that more directly impacts children.  It all ends with Covid right now so stay tuned for that.

What will be the Federal Reserve's policy towards  interest rates and tapering in the coming months.  A tighter money supply has traditionally been a headwind for stocks, especially if we tighten too quick.  For now that doesn't look to be an issue but things can change.

When will people come back to work.  Bottlenecks in the work place are becoming endemic and threaten economic growth.  People need to get back to their jobs. 

How will tax policy, the democrats 3.5 trillion dollar budget plan and the 1.5 trillion dollar infrastructure plan fare in Congress?

And of course the deteriorating relations between us and the Chinese.

Any Black Swan that comes over the transom.

That's the main list.  Others could come up.  Guess it's time to kick the sand out of the shoes!