Officially, summer runs from the solstice in late June until the equinox in late September. In reality, it's a 100-day sprint from Memorial Day to Labor Day that typically sees markets drift as Wall Street's workforce takes some much needed time off.
Not this year, though. The hot season got off to an earlier than usual stumbling start thanks to some unexpected comments Ben Bernanke made to Congress suggesting that the market's much-loved stimulus program could be wrapped up soon.
The disappointment and shock were palpable, but the ensuing six percent sell-off was the set-up for a powerful rally that took stocks to record highs, only to stall and deliver a withering finish for the entire month of August.
"A return to volatility" is what Hank Smith, the chief investment officer at Haverford, cites as the stand-out theme of the season gone by, as the concept of the Fed ''tapering" roiled stock, bond, currency, and commodity markets. You can listen to Smith's other observations in the attached video, and see what else ranks amongst his most memorable.
Within that volatility, at least for the stock market, it has been a cycle of ups and downs that has left the S&P 500 (^GSPC) about 1.5% below where it was before Bernanke's outburst, albeit now down about 4.5% from the record close set on August 2nd.
But that pales in comparison to the 20% bounce gold has taken over the past two months, as well as the 80% spike in the yield on the 10-year Treasury note, which suffered an unprecdented short-term implosion that saw rates go from 1.60% to 2.90% inside of 90 days.
And lastly, the volatile summer of 2013 could go down in the books as the summer of Summers, as in Larry Summers, who is supposedly making a late charge as the front-runner in the contest to succeed Ben Bernanke.
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- Ben Bernanke