What to watch

Four potential Dow killers to watch in August

With Dow 22,000 alerting Main Street investors to the fact stocks are at record highs, it’s a good time to reiterate that August has been the worst-performing month for the Dow the past 20 years. The Dow has fallen 1.4%, on average, in August and finished up just 50% of the time.

So what events in August could derail the Dow’s record run? LPL Financial compiled a watch list:

Jobs report: The July employment report will be released Friday. Wall Street is looking for a continuation of the upbeat report in June, when the economy created 222,000 jobs. LPL is expecting 180,000 new jobs in August.

Inflation update: The Federal Reserve has hiked interest rates twice this year. But tepid inflation in recent months has complicated its future hike plans. On Aug. 11, investors will get a look at July inflation at the consumer level. If it is weak and stays south of the Fed’s 2% goal, the rate-hike schedule could be pushed back. Back-to-school shopping: The National Retail Federation estimates spending will rise 10.2% to $83.6 billion. Back-toschool shopping will shed clues as to the health of the consumer. Jackson Hole meeting: The world’s central bankers meet Aug. 24-26 in Wyoming for the annual “Monetary Policy Symposium,” which in the past has been used to signal major policy changes. This year, investors will be watching for “signs of tighter” policy, including more clarity on the Fed’s plans to trim its $4.5 trillion bond portfolio.