Making a prediction about what to expect in the stock market in the weeks ahead can be a less than accurate, derision-inducing effort.  However, we are going to take a stab but we are not going to stick our necks out too far.  We believe the markets will be relatively calm over the next few weeks for two reasons:

1. Many traders and portfolio managers on Wall Street vacation in August at places like the Hamptons and the Jersey shore. During this time, they likely won’t be making any major investments so they can relax and enjoy their time off.
2. The Olympics – Barring a terrorist attack, the news stories over the next few weeks will be about the Olympics. These headlines will override any news on the economy – whether positive or negative.  The political talking heads will be on hiatus (thank goodness!) and media coverage will focus on the Olympics and the athletes’ stories.  Given that the conventions are behind us, both candidates likely will take a break from the battlefield.

The real fireworks will begin after Labor Day.  It seems like most of the market disruptions in the recent past have occurred in September or October.  Add in a presidential contest that is unlike any other in modern history and we have a recipe for uncertainty and volatility.  Uncertainty and volatility offers opportunity – like it did with MLPs and BDCs last year.  We will continue to look for those opportunities once the “dull days of summer” are behind us.