August Stock-Market Slump Warning Issued by Fundstrat's Tom Lee
Fundstrat Global Advisors' Tom Lee warns investors to brace for a potential stock-market pullback in August, citing historical performance trends and the already-stretched nature of the market's 2023 performance. Lee points out that August has historically been one of the worst months for stock-market returns, with an average return of just 0.01% since 1950. He also highlights that when stocks fall in August, the average drawdown is 3.2%, implying potential downside for the S&P 500. Additionally, stock-market underperformance in August worsens when the S&P 500 has gained more than 15% through the end of July. Despite gains in August 2020 and 2021, Lee believes widespread wariness could result in a self-fulfilling prophecy. However, he expects any pullbacks to be shallow.