Last month, we wrote about how the market rally had frozen in the face of several obstacles that appeared throughout the month. Fortunately, August saw the market shake off those chills and move higher for the month, making new all-time highs in the S&P 500. Over the course of August, the S&P 500 rose approximately 4%.

Among the reasons for the strong month were:

1. The highest consumer confidence reading — 92.4 — since 2007, up from a strong reading of 90.9 in July.

2. GDP growth, which had previously been announced at 4.0%, was revised upward to 4.2%.

3. Industrial production was up .4%.

4. Housing numbers were solid, as housing starts came in at +15.7% and existing home sales were +2.4%.

5. The labor market showed continued improvement, with jobless claims hovering near an 8 year low and the BLS reporting an increase of 212,000 to non-farm payrolls.

We believe that there is plenty of reason for optimism about the economic recovery and where the markets can go from here. It’s fair to say that “the easy money has been made” in the market since the lows of 2009, but the economy is starting to grow at a more robust pace, which could justify more strong performance for the markets.

Two caution flags remain: Continued geopolitical concerns still exist and uncertainty about interest rate environment. Both of these factors could present concerns for the market, but we continue to believe that any market weakness related to these factors would be temporary.

Thanks for reading this month’s update.

Carl Beck

September 8, 2014