Welcome to Thoughts on the Market.

I'm Mike Wilson, Chief Investment Officer and Chief U.S. Equity

Strategists for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking

about the latest trends in the financial marketplace.

It's Monday, August 12th at 9 a.m. Eastern, so let's get after it.

Over the past 100 years, September has been the worst month of the stock market.

However, over the past 10 years, August has taken the

throne as the worst month of the year. Both months are technically during the

summer, so it's fitting that investors often think of this time of the

year as the dog days of summer.

Part of the reason for why these two months are the weakest is due to the fact that

many market participants are on vacation, reducing the market's overall liquidity.

This can lead to higher volatility than normal if the market sells off for fundamental

reasons. As we entered August, there were plenty of fundamental concerns we think investors

had forgotten about due to their preoccupation with the Federal Reserve's very well telegraphed interest rate cut on July 31st.

Namely, second quarter earnings results in most of the economic data during the month of July

disappointed what were already low expectations.

There were also ongoing trade tensions between the US and China,

a matter left unresolved at the G20 meeting back in June

and that was seemingly forgotten as well.

Now we have another matter to consider.

...