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Aug. 22, 2022
The S&P 500 has
averaged a 1% loss in September—dating back to 1928—its worst month of the
year.
The stock market’s worst month—September—is approaching. This one could be
particularly bad.
The S&P 500 has
averaged a 1% loss in September—dating back to 1928. According to Dow Jones
market data. The same is true for the Dow Jones Industrial Average, dating
back to 1896. Those are the worst monthly performances for both indexes in
the calendar year.
That phenomena is well known, but this year brings about heightened risks
that are coalescing right now. First off, the stock market has already
ripped higher recently, with both indexes up double digits in percentage
terms since their lowest levels of the year in mid June. That is because
markets have watched the inflation rate decline a bit, and the Federal
Reserve responded by noting that it will likely slow down the pace of
interest-rate hikes.
But now, those bets are partially unwinding.
The probability of a
three-quarter-point interest rate hike in September has risen in the past
week, with a half-point raise now seen as less likely. That is bringing borrowing
costs higher, with rates on investment-grade and high-yield bonds moving up
in the past several weeks. That threatens to slow down consumer and
business spending.
There is one piece of good news, though: Some of that selling may have
already begun. The Dow and S&P 500 are down in consecutive days from
Friday, with the latter down about 3% in that stretch. Maybe September has
come early this year.
But for the moment, “the “Don’t Fight the Fed” theme is back on the front
burner,” wrote Louis Navellier, founder of Navellier & Associates.
https://www.businessinsider.com/the-stock-market-crash-of-1929-what-you-need-to-know-2018-4
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