Yesterday, I talked about what I am keeping an eye on, business and consumer confidence, and why I think they are important. Today and tomorrow, I want to talk about how I plan to do that.

Business confidence is leading the headlines right now. With the trade war and the general economic slowdown around the world, U.S. business is reported to be suffering. That seems to be true, but is that suffering bad enough to affect the economy as a whole?

All right, going on vacation was a mistake. The market started dropping just before we left and has recovered upon our return. Sorry about that. Now that I am back, though, we can be confident that the market will keep rising. Right? Right?

Maybe not, but the real issue here is not whether the market will keep rising—that is a consequence, not a cause—but whether confidence, which has kept the economy expanding and the market rising, will persist.

Do I think the Fed has been clear it's not going to react to headlines? I discussed this and more today on Yahoo Finance’s YFi AM.

This afternoon I appeared on CNBC’s The Exchange to discuss the Fed and rate cuts. Listen in to learn more.

Earlier today, I appeared on Yahoo Finance Live: The Final Round to discuss the economy, including consumer spending. Listen in to learn more.

Starting this week, my colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, will be helping me with the Monthly Market Risk Update posts. Thanks for the assist, Sam!

It’s time for our monthly look at market risk factors. Just as with the economy, there are several key factors that matter for the market in determining both the risk level and the immediacy of the risk. Although stocks remain close to all-time highs, the recent volatility is a reminder that, given valuations and recent market behavior, it is useful to keep an eye on these factors.

Starting this week, my colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, will be helping me with the Economic Risk Factor Update posts. Thanks for the assist, Sam!

The economic data released last month was mixed, with improvements in consumer confidence offset by declining business sentiment. Job creation continued to be solid, but there are signs of a slowdown. The yield curve remains inverted despite the rate cut made at the Fed’s July meeting. Although we are not yet at immediate risk levels, there are certain areas of the economy that should be watched closely going forward.

Yesterday, we saw the largest stock market drop of the year. The Dow Jones Industrial Average was down more than 800 points (over 3 percent), an even bigger decline than we saw earlier this month. Plus, we are on track for the worst week of the year. It is a tough time for markets, and investors are worried. But should they be?

The past week has been a tough one for stock investors. The S&P peaked on July 26, and it has dropped every day since then for a total decline of almost 6 percent (as of the close of August 3). This is a large and fast drop that has understandably rattled investors, who wonder why the sudden pullback—and whether it will continue.

In July, U.S. markets were up overall, between 1 percent and 2 percent, and bonds also had gains as interest rates declined. Although international markets were down slightly, by about 1 percent or so, they remained above their long-term trend lines. From a financial perspective, July wasn’t a great month, but it was a pretty good one for investors.