Markets have been in a holding pattern for the past 30 days as we coast towards the end of summer and the Labor Day weekend. The year-to-date Dow Jones Industrial Average, representing the US stock market, is in blue and the 10-year treasury, representing the bond market, is in red.
The market’s recent behavior seems to reflect the Federal Reserve’s uncertainty as expressed in the notes from their July meeting.
The meeting summary depicted a divergence of opinion among the central bankers, whose vote to hold their key rate steady came despite objections from two Fed governors who argued in favor of cutting. Participants generally pointed to risks on both sides of the Committee’s dual mandate, emphasizing the risk of higher inflation and the risk of lower employment
https://www.cnbc.com/2025/08/20/fed-minutes-august-2025.html
The week leading up to the Labor Day weekend is generally slow, as markets have historically experienced a dip in trading due to final summer vacations. There’s even a name for this phenomenon – the Hamptons Effect.
The Hamptons Effect refers to a dip in trading that occurs just before the Labor Day weekend that is followed by increased trading volume as traders and investors return from the long weekend. The term references the idea that many of the large-scale traders on Wall Street spend the last days of summer in the Hamptons, a traditional summer destination for the New York City elite.
https://www.investopedia.com/terms/h/hamptons-effect.asp
However, look for the markets to kick off the fall season of trading with a bang on September 2nd as trading volume returns and August economic data, key to the Fed’s September rate decision, starts rolling in.
Finally, I wanted to mention that I’ve accepted an appointment to the CFP Board Public Policy Council. After taking a break from serving 6 years on the CFP Board Discipline and Ethics Commission, I’m eager to reengage with national leadership in the financial planning profession. Importantly, the workload of this position is promised to be much lighter than my previous assignments.
Here’s what the council does, from the CFP Board website –
The Public Policy Council advises the CFP Board staff on public policy issues affecting CFP Board, its certificants and members of the public. Some past topics include advocacy efforts related to:
Retirement security policies in the United States;
Compensation for financial planning services;
The U.S. Department of Labor’s Retirement Security Rule;
Title regulation of financial planners;
Financial Education
Have a great weekend.
Jack C. Harmon II, CFP®, CIMA
Principal, Harmon Financial Advisors
Registered Principal, Raymond James Financial Services
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