To The Moon

#Dow’s Fifth Straight Gain — But September Could Break the Streak

The Dow just logged its fifth consecutive monthly gain, but I think the streak is increasingly vulnerable to a September reversal.

The warning signs are stacking up fast.

Brent crude has pushed back above $90, while the 10-year Treasury yield has climbed toward 4.75%+ as the Iran conflict reignites inflation fears. At the same time, markets have sharply increased the probability of a September rate hike following Warsh’s hawkish Jackson Hole message.

That creates a particularly uncomfortable setup for equities:

Higher oil → higher inflation expectations → fewer Fed cuts / greater hike risk → higher yields → lower equity multiples.

And the Dow isn’t immune simply because it is more value-oriented. A prolonged oil shock can squeeze consumers and industrial margins, while higher financing costs pressure capital-intensive companies.

The bigger concern is positioning.

The Dow has now risen for five straight months and 15 of the past 16 months, an unusually persistent run. August still finished +1.3%, despite the market already beginning to react to the oil/yield shock.

September therefore doesn’t need a major recession scare to trigger a correction.

It may only need one bad catalyst:

→ Payrolls too strong → rate-hike odds rise

→ CPI too hot → yields jump

→ Oil stays above $90 → inflation fears persist

→ Fed stays hawkish → multiples compress

And we have payrolls arriving this week, followed by more inflation data and the Fed meeting.

My read: the Dow’s risk/reward is deteriorating after five consecutive monthly gains.

I would rather trim weaker, high-multiple names and build cash than chase another leg higher here.

If the macro pressure persists, September could be the month that finally breaks the Dow’s winning streak — and potentially gives investors a much better entry later in the month.