Skip to main content

The thrill of sliding down a water slide happens at the beginning. Initially, there is a sharp, breathtaking decline, followed by a level area that is quick and smooth, after which the rider is deposited into a refreshing pool.

While less than a perfect analogy for financial market activity in August, the water slide comes close.

Stocks fell at a breathtaking clip early in the month, declining by 6% in the first three trading days (see our August Mid-Month Update for more details).

But the fast ride down leveled out, and ultimately stock prices moved back up. For stock investors who maintained their investment strategy, August results were pleasing.

US Large Company stocks rose by 2.3%, and foreign stocks increased by 3.3%. Technology stocks did less well, climbing by 1%.

US small-company stocks struggled, dropping by 1.7%, following a stellar performance in July. Stocks generally have now risen for four straight months, with the last monthly decline occurring in April.

Thus far in 2024, financial market returns have been constructive: Technology, 20.5%; US Large Company, 19.3%; Foreign, 12.1%; US Small Company 10.2%. Bonds returned 1.5% in August and are up 3.2% year-to-date.

Positive stock market returns likely are one factor influencing consumer confidence, as recent data show an upward shift in sentiment.

The Conference Board, a New York-based research organization, said on Tuesday that its consumer confidence index rose in August from July, matching its highest level since February.

Other consumer confidence polls, such as the University of Michigan’s consumer sentiment gauge, and a recent Wall Street Journal survey, point in the same direction.

Below is a snapshot of financial market performance for August.

-RK

US Small Co = Russell 2000 Index; Foreign Stocks = MSCI EAFE Index; US Bonds = Bloomberg US Aggregate Bond Index; US Large Co = S&P 500 Index; Tech Stocks = Russell 1000 Technology Index