Should the lack of volatility in the markets this September be setting off alarm bells? Russ Koesterich says they should, especially in this traditionally “soft” month.  A slowdown in the U.S. services sector may prevent the anticipated interest rate hike from the Fed. The question that remains is whether the recent report from the ISM exaggerates the service sector’s weakness. Reuters looks into the numbers from the ISM. For the last six months, global stocks have been supported by an improved earnings outlook. What happens if actual earnings fail to deliver, and what can you as an investor do to protect your portfolio? Jeffrey Kleintop of Charles Schwab offers some analysis and suggestions.

Once Again, It’s Too Quiet Out There– Volatility has declined to a level that should set off at least a few alarm bells.  Investors tend to overestimate the importance of seasonal effects, but the one exception appears to be the fall, more specifically September, when markets do tend toward weakness.  Russ Koesterich of BlackRock explains. Read more…

U.S. Services Sector Activity Hits A Six And A Half-Year Low–  U.S. services sector activity slowed to a 6-1/2-year low in August amid sharp drops in production and orders, pointing to slowing economic growth. The weak August readings suggested economic growth could be slowing.  Read more…

Mind The Gap: Are Earnings Expectations Too High?-  While many factors vie for investors’ attention, the outlook for earnings is arguably the most important driver of the stock market. After two years of declines, actual earnings may soon begin to turn around. But, with expectations now stretched to the widest gap in more than seven years, stocks are vulnerable to a pullback if actual earnings fail to deliver on the promise of better growth. The potential for the return of volatility is a reminder that rebalancing back to your strategic asset allocation targets may be a smart idea.  Jeffrey Kleintop from Schwab discusses this issue in this article. Read more…

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John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller

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