September Is Usually A Bad Month For Stocks Aug. 30, 2022

 

BARRON’S: September Is Usually a Bad Month For Stocks. This One Could Be Ugly.

 

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