Labor Day—and the underlying meaning to the holiday to honor our workers—is not unique to the United States. But, given where it falls on the calendar, it produces some uniquely American qualities. Like many secular national holidays in the US, the true meaning and essence of the day (see the Department of Labor’s historical narrative here) has been lost to most.
Most of us (including me) have lost the true meaning of the day. For many, it’s the end of summer, a time to head back to school for students and teachers, and a moment to complete yard work for the fall and winter to come. For others, it means the start of football season, the last month of baseball season, a return to college, or a much needed final summer break from work.
Traders like to trade
But Labor Day is well marked on the calendars of traders and investors for its own reasons. The unofficial end of summer is a welcome event in the trading crowd. For sure, we like summer, vacations and work holidays like everyone else, but we also like to trade—and we like action.
This past summer, the markets can be best described as placid, bordering on apathetic. Volatility took its own vacation during July and most of August as investors were content to sit on the sidelines amidst a bull run to all-time highs. Trading volumes were some of the lowest we have seen in recent years during this period, which led to the major averages getting to the highs and then moving sideways in a non-committal fashion. Don’t expect this to last.
In addition to seasonal factors that may play out, my sense is that traders and investors are getting itchy to make something happen—which should make September much more interesting than August. Volatility has been poking its head out of the hole this past week, which signals that the bears are starting to come out of their own midsummer slumber. They will seize any opening to take this market down from its lofty perch.
Labor Day is about celebrating the work of the country and the contributions of the American worker. It marks the end of summer and a time for everyone to go back to work … to labor. But, it also is about the markets getting back to work—thankfully.