Hopeful Quiet Time
August 15 is supposed to be right in the middle of the dog days of August. But we learned recently that the phrase “dog days of August” relates to the period that Sirius, a star known as the “Dog Star,” rises at the same time as the sun. This period is typically in late July until early August. Thus, the phrase is also known more generally as the “dog days of summer.”
What does the dog days of summer mean for the markets? Not only are families taking vacations, so are institutions. The Federal Reserve Board’s Open Market Committee does not meet in August. Congress is in recess and the President is on a long working vacation. Even equity traders and market analysts are on vacation, which typically results in lower trading volume for stocks, bonds and more. Thus, everyone should be taking a long-deserved break during August.
Does that mean that the month will be completely quiet? We can’t really predict a complete time of rest for the markets. Traditionally, during times of lower trading volume, any type of major event could produce more volatility than usual. And, though it seems that everyone in D.C. is on vacation, the world does not go to sleep. Nor does the weather. For our part, we do hope that everyone has a restful remainder of the summer and that the quiet enables those economic sleeping dog days to lie about as well.
The Weekly Market Update
Last week, 30-year fixed rates fell to their lowest level in the past six weeks. For the week ending August 10, Freddie Mac announced that 30-year fixed rates fell to 3.90% from 3.93% the week before. The average for 15-year loans remained at 3.18%, and the average for five-year adjustables moved down slightly to 3.14%. A year ago, 30-year fixed rates averaged 3.45%.
Attributed to Sean Becketti, chief economist, Freddie Mac — “After holding relatively flat last week, the 10-year Treasury yield fell 4 basis points this week. The 30-year rate on home loans moved in tandem with Treasury yields, dropping 3 basis points to 3.90 percent. Recently, Federal Reserve officials highlighted the influence of continued weak inflation data on rates.”
Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.